I think you're forgetting that not all websites/youtube videos are equal. Having a banner ad on some random webcomic is not the same as having one on penny arca

I think you're forgetting that not all websites/youtube videos are equal. Having a banner ad on some random webcomic is not the same as having one on penny arcade, just as having an ad on some youtube video is not the same as having one on smosh's video, just as having an ad on channel 738 is not the same as having one on basic cable. Furthermore, doesn't a website have these same constraints? I only look at each page for a finite amount of time, each youtube video is only a finite amount of length, each website only gets a certain amount of viewers. I think the web in general still has the same constraints as more traditional media, they just aren't as obvious. A website getting x unique visitors could show x unique ads, a different ad for every visitor. But maybe that isn't very effective, so the website reduces the number of ads they show in order to have each ad by seen by more visitors, thus reducing the supply of available ad slots. These constraints aren't as obvious as they are for television or radio, but I think they still exist. I think you're right that J. Startup can't depend on banner advertisements as a form of revenue, but J. Startup is probably using google as the middleman. However, in this situation, J. wouldn't be building an advertising ecosystem, but depending on google's already huge ecosystem. I don't think it will be farfetched in the future to see free hardware given away in order to earn advertising dollars. I bet if televisions were cheaper, broadcasting companies would have given away free hardware, and perhaps in the future hulu will give wifi devices to get people to watch hulu whenever they have a free moment.