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That's a good point, but while I don't have any data, I've heard anecdotally that for services that implement paid user tiers with no advertising, they always m
by danpalmer 4y ago
That's a good point, but while I don't have any data, I've heard anecdotally that for services that implement paid user tiers with no advertising, they always make much more from paid users than ads, on the order of 5-10x. While there is a distribution on how much ads users are worth, it's not enough to overcome that difference _at scale_. There are a small number of users who are worth $$$$, but they're a small amount of absolute revenue because there are so few.
- vasco 4y agoYou're making the same point that you're replying to. The juiciest users pay, so the non-paying users are the penny pinchers that convert way less on ads, so the ad revenue is obviously very low compared to the revenue from the paid users. Similar to how people self selected into iOS and android and to this day its way more effective to advertise to less price sensitive iOS users than Android users with cheap phones, though the effect was even larger in the early days.
- andirk 4y agoSimilar to how the CTR of ads on msn.com or live.com was once way higher than everywhere else because anyone who was fooled in to using those default start pages was probably more easily fooled in all aspects.