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> The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue. but they're alre

> The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue. but they're already paying you. While I appreciate the greed can be there, surely they'd be shooting themselves in the foot. There's many people who would pay who find advertising toxic and they have such huge volumes at free level that they'd be able to make a lot off a low impression cost.

npongratz 9mo ago
The progression of the cable TV industry shows many people are more than happy, or apathetic enough, to allow the industry to double-dip.
- Quarrelsome 9mo ago
  basic people sure, but the early internet showed an extremely strong demand for a better service than cable TV. When that demand is there then people will start seeking other options and building bridges of convenience to help the basic people also port over.
- Workaccount2 9mo ago
  Cable TV is a bad analogy because it was a natural monopoly. Even the disruption route (satellite TV) was another natural monopoly. Netflix doesn't have the moat of "built a physical wire connection to every persons home" that cable TV enjoyed.
  - mananaysiempre 9mo ago
    The moat is the leverage to get licensing deals using the size of the existing user base. You could bootstrap a movie rental business by buying DVDs from a DVD store (then eventually from a DVD distributor, etc.). You cannot bootstrap a movie streaming business by buying streaming rights because nobody will sell them to you. They hardly even sell them to Netflix anymore. The Internet Archive tried to get around the same issue for ebooks by scanning physical books and renting the scans (and not being a business), and it nearly cost them everything.
likium 9mo ago
Go plans at $8 are getting ads too. Netflix introduced a paid plan with ads, and it is more profitable.
- Quarrelsome 9mo ago
  sure but if Netflix keeps up its transition to cable then more people will return to the high seas.
  - 46493168 9mo ago
    There’s an entire generation (Gen Z) that can’t navigate a file system, so I doubt piracy is a true threat in the long term.
    - Quarrelsome 9mo ago
      everyone just needs a little motivation and returning to cable may well do that.
    - jonasdegendt 9mo ago
      Most Zoomers around me that pirate use some application that obfuscates the torrenting part away, they just have to know how to use a search box and hit play.
  - account42 9mo ago
    Won't affect the promotion of the managers that made the number go up with ads.
jsheard 9mo ago
Paying users aren't necessarily profitable users though. It's harder to pin down with OpenAI, but I see no end of Claude users talking about how they're consistently burning the equivalent of >$1000 in API credits every month on the $200 subscription. (not that ads alone would make up an $800 deficit, they'll probably have to enshittify on multiple fronts)
- Quarrelsome 9mo ago
  wouldn't you charge those people more before you start serving ads? Also wont a lot of those sorts of users be running ad block anyway? I'm mildly sus that this is the right way to go.
  - yunwal 9mo ago
    I’m not sure where you’re getting this notion that a paid service introducing ads is a bad business model. It’s been proven time and time again that it’s not. Spotify, Netflix, Prime Video, Hulu, the list goes on, all introduced ads and none of them saw any real backlash. Netflix cracked down on password-sharing and introduced ads in the same year and lived to tell the tale. Unfortunately people just really don’t realize how harmful ads are.
    - Quarrelsome 9mo ago
      I pay for spotify, I don't get ads.
WD-42 9mo ago
They aren’t shooting any feet if the competition is doing it too.
- Quarrelsome 9mo ago
  that's extreme motivation for someone to build a new competitor. Deepseek demonstrated that there's innovation out there to be had at a fraction of the effort.
II2II 9mo ago
> but they're already paying you. That's not how it works. It never has. Even in the days of print publications, the publisher would seek revenues from advertisers, subscribers, and they would sell their subscriber data. (On top of that, many would have contests and special offers which probed for deeper data about the readership.) In some sense, the subscriber data was more shallow. In other senses, it was more valuable. I get what you're saying about shooting themselves in the foot, and I'm sure there will be options for corporate clients that will treat the data collected confidentially while not displaying advertising. I also doubt that option will be available (in any official sense) to individuals much as it isn't available (in any official sense) to users of Windows. For the most part, people won't care. Those who would care are those who are sensitive enough about their privacy that they wouldn't use these services in the first place, or are wealthy enough to be sensitive about their privacy that they would could pay for services that would make real guarantees.
8organicbits 9mo ago
The stats I see for Facebook are $70 per US/Canadian user in ad revenue. I'm not sure how much people would be willing to pay for an ad free Facebook, but it must be below $70 on average. And as the parent comment said, the users who would pay that are likely worth much more than the average user to the advertisers. For the users who refuse to see ads, they'd either use a different platform or run an ad blocker (especially using the website vs the app).
- b112 9mo ago
  But what if Facebook removed all tracking/promotion/ad code? It would have a far, far smaller codebase, and only need 10% of the engineers and resources(servers, ram, databases, etc) it has now.
  - 8organicbits 9mo ago
    Good point, I'm not sure. I'd be interested if anyone knew a good estimate for how much of their operating expenses the ad-tech side took. Presumably Facebook would abandon ads if there was more money to be made in paid subscription, so I'll use corporate greed as evidence that the math doesn't work out. But I don't personally know.

npongratz 9mo ago

The progression of the cable TV industry shows many people are more than happy, or apathetic enough, to allow the industry to double-dip.

Quarrelsome 9mo ago
basic people sure, but the early internet showed an extremely strong demand for a better service than cable TV. When that demand is there then people will start seeking other options and building bridges of convenience to help the basic people also port over.
Workaccount2 9mo ago
Cable TV is a bad analogy because it was a natural monopoly. Even the disruption route (satellite TV) was another natural monopoly. Netflix doesn't have the moat of "built a physical wire connection to every persons home" that cable TV enjoyed.
- mananaysiempre 9mo ago
  The moat is the leverage to get licensing deals using the size of the existing user base. You could bootstrap a movie rental business by buying DVDs from a DVD store (then eventually from a DVD distributor, etc.). You cannot bootstrap a movie streaming business by buying streaming rights because nobody will sell them to you. They hardly even sell them to Netflix anymore. The Internet Archive tried to get around the same issue for ebooks by scanning physical books and renting the scans (and not being a business), and it nearly cost them everything.

likium 9mo ago

Go plans at $8 are getting ads too. Netflix introduced a paid plan with ads, and it is more profitable.

Quarrelsome 9mo ago
sure but if Netflix keeps up its transition to cable then more people will return to the high seas.
- 46493168 9mo ago
  There’s an entire generation (Gen Z) that can’t navigate a file system, so I doubt piracy is a true threat in the long term.
  - Quarrelsome 9mo ago
    everyone just needs a little motivation and returning to cable may well do that.
  - jonasdegendt 9mo ago
    Most Zoomers around me that pirate use some application that obfuscates the torrenting part away, they just have to know how to use a search box and hit play.
- account42 9mo ago
  Won't affect the promotion of the managers that made the number go up with ads.

jsheard 9mo ago

Paying users aren't necessarily profitable users though. It's harder to pin down with OpenAI, but I see no end of Claude users talking about how they're consistently burning the equivalent of >$1000 in API credits every month on the $200 subscription. (not that ads alone would make up an $800 deficit, they'll probably have to enshittify on multiple fronts)

Quarrelsome 9mo ago
wouldn't you charge those people more before you start serving ads? Also wont a lot of those sorts of users be running ad block anyway? I'm mildly sus that this is the right way to go.
- yunwal 9mo ago
  I’m not sure where you’re getting this notion that a paid service introducing ads is a bad business model. It’s been proven time and time again that it’s not. Spotify, Netflix, Prime Video, Hulu, the list goes on, all introduced ads and none of them saw any real backlash. Netflix cracked down on password-sharing and introduced ads in the same year and lived to tell the tale. Unfortunately people just really don’t realize how harmful ads are.
  - Quarrelsome 9mo ago
    I pay for spotify, I don't get ads.

WD-42 9mo ago

They aren’t shooting any feet if the competition is doing it too.

Quarrelsome 9mo ago
that's extreme motivation for someone to build a new competitor. Deepseek demonstrated that there's innovation out there to be had at a fraction of the effort.

II2II 9mo ago

> but they're already paying you. That's not how it works. It never has. Even in the days of print publications, the publisher would seek revenues from advertisers, subscribers, and they would sell their subscriber data. (On top of that, many would have contests and special offers which probed for deeper data about the readership.) In some sense, the subscriber data was more shallow. In other senses, it was more valuable. I get what you're saying about shooting themselves in the foot, and I'm sure there will be options for corporate clients that will treat the data collected confidentially while not displaying advertising. I also doubt that option will be available (in any official sense) to individuals much as it isn't available (in any official sense) to users of Windows. For the most part, people won't care. Those who would care are those who are sensitive enough about their privacy that they wouldn't use these services in the first place, or are wealthy enough to be sensitive about their privacy that they would could pay for services that would make real guarantees.

8organicbits 9mo ago

The stats I see for Facebook are $70 per US/Canadian user in ad revenue. I'm not sure how much people would be willing to pay for an ad free Facebook, but it must be below $70 on average. And as the parent comment said, the users who would pay that are likely worth much more than the average user to the advertisers. For the users who refuse to see ads, they'd either use a different platform or run an ad blocker (especially using the website vs the app).

b112 9mo ago
But what if Facebook removed all tracking/promotion/ad code? It would have a far, far smaller codebase, and only need 10% of the engineers and resources(servers, ram, databases, etc) it has now.
- 8organicbits 9mo ago
  Good point, I'm not sure. I'd be interested if anyone knew a good estimate for how much of their operating expenses the ad-tech side took. Presumably Facebook would abandon ads if there was more money to be made in paid subscription, so I'll use corporate greed as evidence that the math doesn't work out. But I don't personally know.