7 ms·

I feel like for every business there exists threshold where PMs get convinced that selling ads isn't just a free-tier business model, but rather that any other

I feel like for every business there exists threshold where PMs get convinced that selling ads isn't just a free-tier business model, but rather that any other revenue generation method sits within the Pareto frontier that an ads tier defines. I once heard an ads account PM put it this way: "If you have enough money to buy a no-ads tier, someone will pay more to put an ad there"

Nextgrid 5y ago
This is exactly why regulation is needed - not to ban ads, but to curtail the noxious effects of them (privacy invasion, lack of liability for malicious ads) to tip the balance back the other way.
- UnFleshedOne 5y ago
  And if they accidentally trip and ban ads, all the better.
mikepurvis 5y ago
This definitely happened for cable TV and satellite radio— both started life as a paid, ad-free alternative, but the promise of a premium market that moneyed individuals had paid to escape to was just too enticing. To a lesser extent you see it with magazines too, especially in the fashion space, where brands don't want to be in a "free" magazine, so the magazine has to charge a cover price, but they practically give away subscriptions since the cover price is not where they're making money.
- btown 5y ago
  And even for streaming services, the rationale is "we can still call it ad-free, if the only preroll ads we run are for our own shows!" - which doesn't make them any less an advertisement! If anything, it's the most measurable of (non-interactive) video ads, since the viewer's future engagement with the advertised show (correcting for the baseline expected viewership among subscribers not shown that ad) can be attributed to the advertisement itself. And if retention can then be attributed to engagement, there's a monetary value for that ad space, which goes back to the grandparent post's sentiment: "someone will pay more to put an ad there."
  - PaulDavisThe1st 5y ago
    > And even for streaming services, the rationale is "we can still call it ad-free, if the only preroll ads we run are for our own shows!" - which doesn't make them any less an advertisement! I don't think I can agree with this. While I don't like pre-roll mini-trailers (or even full trailers), the fact that I've chosen to pay for the service is a pretty strong hint that I'd like to know what offerings they have. The obvious alternative is to provide me with good discovery tools so that I never miss anything myself. I prefer that, but I don't think that the pre-rolls really violate a "no advertising" model. It's certainly better than NPR/PBS's interpretation of "no advertising", which I was told in the 90s is essentially just "no quality adjectives".
    - AJ007 5y ago
      What you see over time is that as products mature, they add advertising and then saturate it. The reason is filling your product with ads kills retention, so you can’t do this early on. The interesting part to this is that once the competition is heavily saturated with ads, having no ads gives you a distinctive edge over them. The thing that interests me the most is how ads can significantly degrade the quality of the product itself. This is really apparent with Amazon, where their ad platform not only pushed up the visibility of very low quality products but also made their seller ecosystem dependent on them. Amazon’s search results are their content, which are now ads. In order to outbid competitors, you need to increase your margins, which you do by selling a shittier product. I suspect we will see a similar thing happen to Apple’s App Store over time.
      - JadeNB 5y ago
        > I suspect we will see a similar thing happen to Apple’s App Store over time. Already the terrible curation makes it hard to find any quality content in Apple's App Store. (I'll never understand why it's so hard to get a search for the exact name of an app to return that app first.) I shudder to imagine how bad it could be if they were incentivised to make it bad.
        5y ago
- vel0city 5y ago
  > This definitely happened for cable TV I keep seeing this, but in the US this isn't really true. Cable TV was originally sold as a way to get all the surrounding broadcast TV stations in to your home with near perfect signal quality without needing an antenna. This meant you would get all the ads those broadcast networks aired. Sure, cable networks did not inject additional ads, but there were still ads. It took a while before premium cable-only channels arrived, some of which touted being ad-free. But even then many of those premium channels had advertising from the beginning. Ads were on cable TV since the get go.
  - rbobby 5y ago
    ... and more channels. In the dawn of time, also known as my childhood, there were 2 channels. Then 3. TV's had dials and it was my job, like so many other youngest children, to turn them. Then cable came and there were a lot of channels. So many channels you needed the newspaper's TV schedule to figure out what to watch. No more flipping between 2 or 3 channels hoping for something better. Planned viewing had arrived. No more sitting by the TV, spinning through channels, and getting clouted for spinning to fast because you'll break it! And finally, freeing children everywhere from the tyranny of the dial, remote control! No longer chained to the TV, children could return to lounging on the comfy family room chesterfields. Never forget that cable, and the TV remotes it spawned, freed millions of children from spinning TV dials!
    - croutonwagon 5y ago
      I remember when we got a fancy TV with a…wired…remote. It was amazing. Of course the wire was about 2 feet too short. So it was still my job to sit on the floor and in the middle of the room to be the “wireless” portion of the remote. But still, was so much better than having to walk up every 5 minutes (my dad loved making me flip channels during commercials, even though often commercials were often synced between abc, nbc, and cbs). But then came PBS
      - rbobby 5y ago
        > So it was still my job to sit on the floor and in the middle of the room to be the “wireless” portion of the remote Those were the days (the archie bunker theme) :)
- AniseAbyss 5y ago
  And it didn't happen with Netflix. There's a market for subscriptions. Unfortunately you have to provide a really fucking great product. And most of these companies don't.
  - LinAGKar 5y ago
    Not yet, but some other streaming services have added ads to the paid service, and made the ad-free version more expensive (Hulu, HBO, C More)
dangoor 5y ago
There are some for whom the paid tier is "get rid of ads". YouTube, Spotify.
- njovin 5y ago
  Even the Spotify paid tier has ads in podcasts. There's no escape.
  - lovestory 5y ago
    That's not Spotify's fault. The ads are added by podcast host as a part of the show itself. You will have ads regardless of where you listen to your podcasts.
  - jdavis703 5y ago
    Aren’t those native ads though? Or is Spotify making money off them too?
    - tomerv 5y ago
      They are, and I think that Spotify should work to ban them. If I'm listening to a podcast on Spotify, then presumably the podcast creator is already getting my money (indirectly, via Spotify) and therefore I should get an ad-free version.
      - jdavis703 5y ago
        This gets to a question of what’s an ad. Take EDM DJs. Could they advertise an upcoming festival they’re playing at, even though the main purpose of the podcast is playing music?
        efaref 5y ago
        > Could they *advertise* an upcoming festival Yeah, that's an ad. It's even in the sentence.
      - 5y ago
jonnycomputer 5y ago
+ product placement in shows and films, + selling information gleaned from consumption habits (e.g. song choice on Spotify, etc.) Don't necessarily have to target on the platform itself.

Nextgrid 5y ago

This is exactly why regulation is needed - not to ban ads, but to curtail the noxious effects of them (privacy invasion, lack of liability for malicious ads) to tip the balance back the other way.

UnFleshedOne 5y ago
And if they accidentally trip and ban ads, all the better.

mikepurvis 5y ago

This definitely happened for cable TV and satellite radio— both started life as a paid, ad-free alternative, but the promise of a premium market that moneyed individuals had paid to escape to was just too enticing. To a lesser extent you see it with magazines too, especially in the fashion space, where brands don't want to be in a "free" magazine, so the magazine has to charge a cover price, but they practically give away subscriptions since the cover price is not where they're making money.

btown 5y ago
And even for streaming services, the rationale is "we can still call it ad-free, if the only preroll ads we run are for our own shows!" - which doesn't make them any less an advertisement! If anything, it's the most measurable of (non-interactive) video ads, since the viewer's future engagement with the advertised show (correcting for the baseline expected viewership among subscribers not shown that ad) can be attributed to the advertisement itself. And if retention can then be attributed to engagement, there's a monetary value for that ad space, which goes back to the grandparent post's sentiment: "someone will pay more to put an ad there."
- PaulDavisThe1st 5y ago
  > And even for streaming services, the rationale is "we can still call it ad-free, if the only preroll ads we run are for our own shows!" - which doesn't make them any less an advertisement! I don't think I can agree with this. While I don't like pre-roll mini-trailers (or even full trailers), the fact that I've chosen to pay for the service is a pretty strong hint that I'd like to know what offerings they have. The obvious alternative is to provide me with good discovery tools so that I never miss anything myself. I prefer that, but I don't think that the pre-rolls really violate a "no advertising" model. It's certainly better than NPR/PBS's interpretation of "no advertising", which I was told in the 90s is essentially just "no quality adjectives".
  - AJ007 5y ago
    What you see over time is that as products mature, they add advertising and then saturate it. The reason is filling your product with ads kills retention, so you can’t do this early on. The interesting part to this is that once the competition is heavily saturated with ads, having no ads gives you a distinctive edge over them. The thing that interests me the most is how ads can significantly degrade the quality of the product itself. This is really apparent with Amazon, where their ad platform not only pushed up the visibility of very low quality products but also made their seller ecosystem dependent on them. Amazon’s search results are their content, which are now ads. In order to outbid competitors, you need to increase your margins, which you do by selling a shittier product. I suspect we will see a similar thing happen to Apple’s App Store over time.
    - JadeNB 5y ago
      > I suspect we will see a similar thing happen to Apple’s App Store over time. Already the terrible curation makes it hard to find any quality content in Apple's App Store. (I'll never understand why it's so hard to get a search for the exact name of an app to return that app first.) I shudder to imagine how bad it could be if they were incentivised to make it bad.
      - 5y ago
vel0city 5y ago
> This definitely happened for cable TV I keep seeing this, but in the US this isn't really true. Cable TV was originally sold as a way to get all the surrounding broadcast TV stations in to your home with near perfect signal quality without needing an antenna. This meant you would get all the ads those broadcast networks aired. Sure, cable networks did not inject additional ads, but there were still ads. It took a while before premium cable-only channels arrived, some of which touted being ad-free. But even then many of those premium channels had advertising from the beginning. Ads were on cable TV since the get go.
- rbobby 5y ago
  ... and more channels. In the dawn of time, also known as my childhood, there were 2 channels. Then 3. TV's had dials and it was my job, like so many other youngest children, to turn them. Then cable came and there were a lot of channels. So many channels you needed the newspaper's TV schedule to figure out what to watch. No more flipping between 2 or 3 channels hoping for something better. Planned viewing had arrived. No more sitting by the TV, spinning through channels, and getting clouted for spinning to fast because you'll break it! And finally, freeing children everywhere from the tyranny of the dial, remote control! No longer chained to the TV, children could return to lounging on the comfy family room chesterfields. Never forget that cable, and the TV remotes it spawned, freed millions of children from spinning TV dials!
  - croutonwagon 5y ago
    I remember when we got a fancy TV with a…wired…remote. It was amazing. Of course the wire was about 2 feet too short. So it was still my job to sit on the floor and in the middle of the room to be the “wireless” portion of the remote. But still, was so much better than having to walk up every 5 minutes (my dad loved making me flip channels during commercials, even though often commercials were often synced between abc, nbc, and cbs). But then came PBS
    - rbobby 5y ago
      > So it was still my job to sit on the floor and in the middle of the room to be the “wireless” portion of the remote Those were the days (the archie bunker theme) :)
AniseAbyss 5y ago
And it didn't happen with Netflix. There's a market for subscriptions. Unfortunately you have to provide a really fucking great product. And most of these companies don't.
- LinAGKar 5y ago
  Not yet, but some other streaming services have added ads to the paid service, and made the ad-free version more expensive (Hulu, HBO, C More)

dangoor 5y ago

There are some for whom the paid tier is "get rid of ads". YouTube, Spotify.

njovin 5y ago
Even the Spotify paid tier has ads in podcasts. There's no escape.
- lovestory 5y ago
  That's not Spotify's fault. The ads are added by podcast host as a part of the show itself. You will have ads regardless of where you listen to your podcasts.
- jdavis703 5y ago
  Aren’t those native ads though? Or is Spotify making money off them too?
  - tomerv 5y ago
    They are, and I think that Spotify should work to ban them. If I'm listening to a podcast on Spotify, then presumably the podcast creator is already getting my money (indirectly, via Spotify) and therefore I should get an ad-free version.
    - jdavis703 5y ago
      This gets to a question of what’s an ad. Take EDM DJs. Could they advertise an upcoming festival they’re playing at, even though the main purpose of the podcast is playing music?
      - efaref 5y ago
        > Could they *advertise* an upcoming festival Yeah, that's an ad. It's even in the sentence.
    - 5y ago

jonnycomputer 5y ago

+ product placement in shows and films, + selling information gleaned from consumption habits (e.g. song choice on Spotify, etc.) Don't necessarily have to target on the platform itself.