4 ms·

> The extra money will come from people not wanting to watch ads. Having both an ad-supported and paid ad-free versions of the same product is likely an unstab

by kd5bjo 7y ago

> The extra money will come from people not wanting to watch ads. Having both an ad-supported and paid ad-free versions of the same product is likely an unstable equilibrium— Customers with disposable income will gravitate towards the ad-free product, and those are the people that advertisers are really paying for access to.

bryanrasmussen 7y ago
I think that's opposite, whenever I see studies of ad-free and ad-supported it seems like most customers went for ad-supported solutions. Maybe though other forms of online content are different than video. Also I'm not sure if disposable income is the only factor that advertisers aim for, I mean a lot of advertisers aim for the youth market which sure have some disposable income but more importantly have disposable time.
basch 7y ago
Why would a streaming provider not offer the customer an equal cost to not be advertised to, that the advertisers are paying to advertise to? Plus, I would still expect ad free to allow an ad before the show starts, although its often an ad for other content, a la Disney Channel only playing ads for other Disney channel shows.
- kd5bjo 7y ago
  It’s tricky to nail down how much revenue loss each switch to ad-free will cost because you’re splitting your demographics. If you’re playing ads in the paid version, it’s by definition not ad-free; it’s some kind of hybrid that I haven’t thought enough about to address. If enough viewers that actually buy things move over to your ad-free product, you tank the value per impression that advertisers are willing to pay. Thus you lose not only the impressions of people who pay, but also the lower the value of each ad you’re still showing. I suspect that this will cause most providers to be either primarily subscription or primarily advertising, to the extent that the less-popular choice doesn’t have enough customers to be worth keeping around.

by kd5bjo 7y ago

bryanrasmussen 7y ago

I think that's opposite, whenever I see studies of ad-free and ad-supported it seems like most customers went for ad-supported solutions. Maybe though other forms of online content are different than video. Also I'm not sure if disposable income is the only factor that advertisers aim for, I mean a lot of advertisers aim for the youth market which sure have some disposable income but more importantly have disposable time.

basch 7y ago

Why would a streaming provider not offer the customer an equal cost to not be advertised to, that the advertisers are paying to advertise to? Plus, I would still expect ad free to allow an ad before the show starts, although its often an ad for other content, a la Disney Channel only playing ads for other Disney channel shows.

kd5bjo 7y ago
It’s tricky to nail down how much revenue loss each switch to ad-free will cost because you’re splitting your demographics. If you’re playing ads in the paid version, it’s by definition not ad-free; it’s some kind of hybrid that I haven’t thought enough about to address. If enough viewers that actually buy things move over to your ad-free product, you tank the value per impression that advertisers are willing to pay. Thus you lose not only the impressions of people who pay, but also the lower the value of each ad you’re still showing. I suspect that this will cause most providers to be either primarily subscription or primarily advertising, to the extent that the less-popular choice doesn’t have enough customers to be worth keeping around.