> I’m quite happy with the products where you just directly pay them and receive a service
I’m the same way, but we’re a strong minority of users. I love that I can simply pay for YouTube Premium and not have ads, but that’s generally not a workable business model for many types of tech companies. In fact, I’m a bit surprised Google hasn’t done away with that yet, because I worked at a different tech company that frequently assessed the feasibility of subscription payments vs ad revenue, and the math just never worked out. There simply aren’t enough people willing to pay an amount that would offset the ad revenue loss. It’s the difference between stated preference and observed preference in consumer behavior.
I think paying subscribers are generally much more valuable than users monetized by ads. The problem is just that only a small percentage are willing to pay. But I’m pretty sure that per user YouTube Premium subscribers are worth a lot more to Google than free users, so I doubt they’ll get rid of it (for financial reasons anyway).
I'm not sure about that, either way. I feel like I've seen cases where this is true, and cases where it isn't.
For YouTube, for example, I'd guess this could be true, now. It depends on hours and type of content watched, yes? While the charge to advertisers per ad impression is very low, and low enough for click-throughs / other categories that might be considered 'hits' in advertisers' search for customers*, it is presumably carefully metered to ensure solidly net positive "monies"** to Google. YouTube premium is billed at a flat rate - hence, its worth likely varies rather inversely by "hours watched" as compared to ad-supported viewing, right? I.e., the best "premium" customer, strictly from the POV of max direct revenue / profit should be one who pays and doesn't watch even a second of YouTube content in a given month.
Obviously, I'm simplifying all of this a bit, and, also, not really getting to the point efficiently - Sunday morning blah blah. So, to wrap, it's all about distributions. Oftentimes, when companies introduce plans like "premium", the heaviest users immediately sign up. The distribution is often heavily skewed, initially. Over time, "non-addicts" and such do accrete ... distribution shifts a bit. That's basically why it's not so clear to me - on the one hand, YT premium charges quite a lot, AFAIK, compared to $ / ad ... but, at some number of hours viewed, that stat flips. I.e., YT makes less money (directly, at least) from Premium. Now, that's probably a quite high # of hours. But, I just have no sense of what it might be and what the metrics look like.
And, ultimately, this ended up also being a long-winded way of saying my brain still isn't fully online and I'm too dull / lazy to try and pull up Google's / Alphabet's 10-Ks etc. ... but not too dull / lazy to let the world read a big ol' pile of words! Ugh... Almost as bad as drunk texting.....
I think the option to go with ads or payments is fine. I pay for YouTube and receive a wonderful experience, others don’t want to or can’t pay, and they can still use the platform.
I’m the same way, but we’re a strong minority of users. I love that I can simply pay for YouTube Premium and not have ads, but that’s generally not a workable business model for many types of tech companies. In fact, I’m a bit surprised Google hasn’t done away with that yet, because I worked at a different tech company that frequently assessed the feasibility of subscription payments vs ad revenue, and the math just never worked out. There simply aren’t enough people willing to pay an amount that would offset the ad revenue loss. It’s the difference between stated preference and observed preference in consumer behavior.