Ok, let's take a step back and look at your analogy. Pollution is a classic problem of externalities: one party is doing something that has costs, but those costs fall on people who are uninvolved. You have a company that is producing lots of pollution while creating products (A), the people who buy those products (B), and the people who are harmed by pollution (C). The reason that A doesn't take appropriate steps to avoid creating pollution is that neither A nor B suffer most of the costs of the pollution; those fall on C.
Netflix adding an ad-funded option does not fit that model because, as I said above, there are no externalities. It is a transaction entirely between Netflix and its viewers, with no uninvolved third parties who receive "toxic waste". Each potential subscriber can decide whether they prefer to pay larger amount for the current experience, or a smaller amount and also have to view ads.
βIt is difficult to get a man to understand something, when his salary depends on his not understanding it.β
> I said above, there are no externalities.
A point that you are missing is one that is often overlooked and deserves a proper essay, but to keep it short: the quality of the products is affected by the business model.
I contend that ads themselves are the waste, but it is not just those directly watching the ads that suffer from it. When a service becomes funded by ads, the best metric for quality (customers willing to pay for the product) gets separated from the best metric for its sustainability (revenue and profitability).
This is why a large part of why journalism is horrible today: any news editor has to prioritize what gives them eyeballs over "quality reporting", so no matter how many actual subscribers a newspaper still has, it is still going to be over-polarized, play to outrage culture and more "infotainment" than actual journalism.
More examples?
- Spotify and the Joe Rogan drama. Whether you agree/disagree and support/disapprove of whatever he is talking about on his show, would you agree that this whole thing would be a nothingburger if his audience were limited to the people willing to pay money to hear him?
- The whole of the sports industry. Remove "broadcast rights" and all the advertising that comes with it, and there would not be NBA kowtowing to China, or FIFA pushing a World Cup built in Qatar on the back of slave labor, or F-1 in bed with the Saudis, etc, etc.
Streaming services are already bad in the sense that they rather cater to quantity over quality, but at least the fact that people have to pay something is some kind of filter on "minimum quality". With an ad-funded model this filter is completely removed and everything starts getting produced for the lowest common denominator.
As you should be well aware, the transactions in volving advertising are not between the media channel and its audience, but between the media channel and its advertisers. The audience is the good sold.
I'm curious as to just what research you've done into the corrosive effects of advertising on media, the public, and audiences yourself. You might begin with a mid-1990s Stanford research project on the subject:
[W]e expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.
There's a delightful 1909 pubication I've recommended numerous times here and elsewhere, Commercialization and Journalism, by Hamilton Holt, a magazine publisher himself. It's short, information-dense, highly-readable, and describes the state of the media industry as the implications of a business model based on mass advertising was first becoming apparent.
It is introduced with quote from John Swinton (the "anonymous New York City journalist" of Holt's text):
There is no such thing in America as an independent press. I am paid for keeping honest opinions out of the paper I am connected with. If I should allow honest opinions to be printed in one issue of my paper, before twenty-four hours my occupation, like Othello's, would be gone. The business of a New York journalist is to distort the truth, to lie outright, to pervert, to vilify, to fawn at the foot of Mammon, and to sell his country and his race for his daily bread. We are the tools or vassals of the rich men behind the scenes. Our time, our talents, our lives, our possibilities, are all the property of other men. We are intellectual prostitutes.
I've compiled a light reading list of other sources which you might find compelling. It in addition to Bagdikian cited by the Stanford researchers, notable names such as Bernays, Chomsky, and McLuhan, and your own former colleague Tim Wu, to whom you might also add Tristan Harris. I'd also draw your attention specifically to Jerry Mander, who though the medium he criticised was television has many concerns that apply also to the Internet and mobile devices.
Netflix adding an ad-funded option does not fit that model because, as I said above, there are no externalities. It is a transaction entirely between Netflix and its viewers, with no uninvolved third parties who receive "toxic waste". Each potential subscriber can decide whether they prefer to pay larger amount for the current experience, or a smaller amount and also have to view ads.