It seems that no one is interested in the model where subscribers pay for no ads. Look at Hulu. You can buy Hulu Plus and... still get ads. If Hulu Plus was ad

It seems that no one is interested in the model where subscribers pay for no ads. Look at Hulu. You can buy Hulu Plus and... still get ads. If Hulu Plus was ad free I would sign up immediately. So why is that? There are several potential reasons: 1. Those providing such services like advertising or, rather, they like the relationships they have with advertisers. Consider [1] (second time quoted this today!): > Since the carriers had all the power, getting any distribution (which usually meant getting on the handset “deck”) meant doing a business development deal with the carriers. Business development in this case meant finding the right people at those companies, sending them iPods, taking them to baseball games, and basically figuring out ways to convince them to work with you instead of the 5,000 other people sending them iPods and baseball tickets. The basis of competition was salesmanship and capital, not innovation or quality. Companies, and particularly sales guys, like having something to sell (being ad inventory). They like the perks this gets them (and the commissions of course). 2. Subscribers aren't willing to pay what the advertising brings in. I'm curious about this but haven't seen any numbers. Take an episode of The Big Bang Theory. How much does each episode cost to produce? How much does each ad bring in? How much does the national network earn in affiliate fees? How much of the advertising revenue is product placement? If you had these numbers, you could calculate what each viewer is worth. I suspect it's a lot less than what such companies charge on iTunes and elsewhere; 3. A correlation between the people willing to pay for no ads and being the target of those ads, which means if you're willing to pay for no ads, you need to pay higher than what ad revenue / viewers might otherwise suggest; and 4. Lack of metrics in broadcast and print media. Sales guys are known to exaggerate (and basically just make up) conversion numbers on ad campaigns. The reality I'm sure is a lot less but there's no real way to tell. With online advertising, you can tell, which possibly explains it's lower cost/value compared to traditional advertising; 5. Related to (4), people pay for broadcast and print advertising what they do, largely because that's what it's always cost; and 6. Limited inventory drives up the cost. Inventory is not a problem online. As for Twitter, I suspect they haven't done anything interesting with advertising (and monetization) because that's a hard problem to solve. I mean, people need to see ads for them to be ads right? At that point, how exactly are you going to advertise to people who mostly use an API, other than through their Twitter stream? [1]: http://cdixon.org/2010/06/06/steve-jobs-single-handedly-restructured-the-mobile-industry/ http://cdixon.org/2010/06/06/steve-jobs-single-handedly-rest...