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Why must every app monetize through ads? Why can't they provide features worth paying for?
by rognjen 5y ago
Why must every app monetize through ads? Why can't they provide features worth paying for?
- nowherebeen 5y agoI think you kind of answer your own question. Social media is just a gossip page on steroids. None of their features are worth paying for; at least, not enough people are willing to pay for it. They realized given showing ads and charging customers, showing ads probably generates 10x revenue for them. Plus, what's to stop another person to offer a free reddit clone?
- rognjen 5y agoThey've never tried generating revenue from other meaningful features. A marketplace would have a very real value for users. And it would create a much better moat.
- adolph 5y agoRing, ring. Revenue team, call for you from Cambridge Analytica on line one!
- gonzo41 5y agoPeople pay for junk food all the time. Maybe internet companies are being too greedy and they are pricing themselves incorrectly. Would you pay $2 USD for all of reddit for a year? How many users does reddit have? It'd probably be a lot of money, but not super profitable. Hence they use adds because they won't shift on price.
- huseyinkeles 5y agoBecause no one pays?
- rognjen 5y agoUsers pay for marketplace features for anything from handmade bird houses to used underwear.
- joegahona 5y agoBecause coming up with features worth paying for is very, very hard. Which ad-free apps do you currently pay for?
- rognjen 5y agoI pay for several things that make me money. If Reddit added features that let their users make money they'd be able to charge for them.
- PhoenixReborn 5y agoThe alternative monetization model is usually subscriptions / freemium features. These don't usually work out for social media sites as people are not willing to pay for user generated content, and the main draw is the content itself so freemium features are usually not high-value enough. Thus, the only remaining viable model is ads.
- rognjen 5y agoThat's one of the things I suggest. Copy Patreon. They've shown that users are willing to pay for "user generated content"
- marcinzm 5y agoIsn't that basically Medium?
- rognjen 5y agoAnd Substack. And Reddit has 10x their traffic.
- marcinzm 5y agoReddit has 10x the traffic because it's free.
- rognjen 5y ago(Can't reply to the other comment) > Reddit has 10x the traffic because it's free. Reddit acquired more traffic because it's free, true. But now, they aren't looking to acquire more traffic. They're looking for more revenue. One way to get that revenue is to allow already existing content creators to charge for a part of the content. I think that would not only encourage better content but would bring in other users and generate good revenue.
- marcinzm 5y agoReddit's model is based on unpaid moderators managing most of the site. There's already controversy around a few moderators controlling all the large communities, karma farming and behind the scenes deals. Introducing money into the mix will just result in even more abuse as moderators try to take their own cut. It's a very messy eco-system that money will just make even messier.