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The idea of replacing ads with direct payments isn't entirely new, and the reason for it failing far more often than not is that nobody is willing to spend what
by IfOnlyYouKnew 6y ago
The idea of replacing ads with direct payments isn't entirely new, and the reason for it failing far more often than not is that nobody is willing to spend what they represent in ad-value themselves.
If you just divide FB's revenue by users you'll get, say $20/year (no idea, someone look it up).
But if FB were to offer an ad-free experience for $20, the users willing to pay will be the most valuable. If you're willing to pay $20, you are probably worth $40 in advertising. Maybe you'd be willing to pay $40? Turns out those people are worth $80.
- alpha_squared 6y agoAnd that's sort of the problem with chasing as much revenue as possible and is why capitalism has been in the crosshairs for conversations on equity as of late. I think the idea has merit, a paid social media platform that fosters engagement with people you care about rather than driving "engagement" with the goal of more ad revenue.
- deleted 6y ago[deleted]
- BbzzbB 6y agoYou oughta open a FB quarterly presentation some day, it is quite eye opening how off the charts they are in terms of user monetization. $20 yearly wouldn't cut it at all, in North America the average revenue per user (ARPU, trailing 12-months) is about $145 (yes, $145 * 253M monthly active users). It's not even enough to match the worldwide ARPU (about $29, for 2.6B users). The value FB extracts from it's users, particularly in NA, is simply astonishing, I'll leave you to Googling the ARPU of other web platforms to get an idea. https://investor.fb.com/financials/?section=quarterlyearnings https://investor.fb.com/financials/?section=quarterlyearning...
- IfOnlyYouKnew 6y agoI actually feel quite accomplished to be less than <50% off without ever having the slightest interest in reading their financial reports.
- harikb 6y agoThis! I have been trying to make this point for a while. I will be quoting this whenever I can :)
- cma 6y agoMaybe they could price discriminate based on how much you are worth in advertising.
- mrweasel 6y agoThe where some numbers in 2016 saying that a US user was worth around $60 per year, EU users a little less (around $40). The users in the rest of the world is worth only a few dollars a year, if anything. https://www.theguardian.com/technology/2016/jan/28/how-much-are-you-worth-to-facebook https://www.theguardian.com/technology/2016/jan/28/how-much-...