Advertisements have emerged on Substack's 'ad-free' newsletter platform
businessinsider.com
businessinsider.com
This isn't a theoretical economics experiment that can be carried out on a spreadsheet, where you can neatly decouple ad revenue from the calculation of customer lifetime value and spit out a nice round price point for an ad-free experience. This price would need to be revised quarterly at least as to account for ad revenue seasonality and changing subscriber numbers.
> As an isolated event, advertising on Substack is no big deal. But if it becomes ubiquitous, the funding model of the platform could be at risk, forcing Substack to either clamp down on this cottage industry or embrace it. Substack could incorporate advertising into its product, but doing so would contradict the platform's commitment to remaining ad-free.
So, the ads will be tolerated for as long as Substack does not have a native ad platform through which all ads must flow through.
Since there are services that have ad-free tiers I think it can work that way.
Hulu*, for example has an ad-free tier and they don't change the price quarterly.
* Yes, I know there are something like 3 shows that still have ads, but it doesn't change my argument.
https://www.civilbeat.org/2017/08/lets-preserve-and-perpetua...
Digital ads are also right there in front of you, and you can go from ad impression --> sale right there on the screen. If your billboard is on the side of your building, located in some remote office park, well, the reach isn't as good.
Also sounds like the differences are in degree, not in kind.
I don't know how many youtube users are paying for it, but youtube premium is still a thing, and I hope it continues to be. Seems like they're making it work somehow.
Also remember those ads are not free, they come at great cost of bandwidth and compute, resulting in net co2 emission. If I as a user want to object to that, using an ad blocker is morally completely valid.
I mostly prefer to watch DVDs and employ an ad blocker so that every day existence doesn't require my brain to edit ads out of reality because it's been trained by 25 years of abuse from the internet that this is necessary to just be able pretend like I exist independent of my eyeballs' worth to some goddamn shysters halfway across the world. You know, like most of 400,000 years of human existence.
Come to think of it, maybe I'll sign off now.
On one hand, that sounds miserable. Only 1% of the users are paying! On the other hand, a Premium subscriber is an order of magnitude more profitable. The ads run rate seems to be about $20B/year, and subscriptions behind at just a factor of 5 at about $4B/year.
(The $20B is a hard number from the Q3 earnings, $4B is back of the envelope. It's hard to say just how e.g. regional pricing if affecting it, or how the family plans are counted.)
Why should it be any different for ads? Advertising is a cancer on society, by itself its purpose is to waste some person's time by showing them something they haven't asked for, sometimes in hope to drive a purchase. We've basically normalized intentionally wasting people's time (in aggregate this time can be expressed in human lifetimes) for the benefit of a select few (the advertisers). Advertising also has secondary negative effects where it perverts the incentives between service providers and their users (social networks' objective is to make you look at ads, not facilitate communication with your friends/family), sometimes up to the point where said service providers promote harmful content to drive ad views ("engagement" as they call it) where said content then leads to mental health issues, broken relationships and crime (like the radicalization of the right-leaning Trump supporters that ended up storming the Capitol).
Also, bank robbery isn't usually very lucrative, and they've made it harder and less lucrative over time. "According to the FBI a bank robbery averaged a take of $4,000 in 2009, which may not have been sufficient to yield the thieves a positive return on their enterprise. You see, at today's prices, the robbers would need to expend $4,442 for the guns, bullets, and masks used in a typical bank robbery." http://bastiat.mises.org/2014/09/the-basic-economics-of-bank...
Some crime has been made pretty unprofitable.
There's no reason the same couldn't apply to advertising. We could implement (and actually enforce - so unlike the GDPR for example) privacy regulations that would make ad tracking more transparent and give consumers a choice, or repealing Section 230 protections for platforms that take on an publisher role by prioritizing certain content to generate "engagement". These would make advertising less lucrative and let other business models take over.
So it's very true, you cannot escape the advertisements.
The bigger issue is the people that would pay to remove ads have more expensive habits and are worth much more in ads than the average user (though maybe that is somewhat counteracted by being more savvy against scams delivered through ads).
It's very mild to say that adverts "risk Substack's funding model". I'd be more dramatic - advertising like this risks Substack's brand reputation, and the subscription incomes of every non-advertising publisher on it; in other words, the existence of the business itself. If I'm paying to get ad-free content, and ads slip in anyways - I'm liable to blame Substack.
At the end of the day, it is fundamentally a platform for sharing opinions.
Also, newspapers have a mix of subscription and ads for decades, I don’t think it’s that shocking that some Substack authors are doing that as well.
That depends on the extent to which users see Substack as a publisher vs a marketplace. If you think Substack's role is just infrastructural, you would blame the author. But if you think Substack has to provide value by cultivating good, high-quality newsletters, then you blame Substack.
But in either case, if you're looking for an ad-free experience, an increase in ads will frustrate you. Even if you don't think Substack is responsible for ads, you may be using it specifically to find ad-free content creators. The moment that guarantee vanishes from the Substack marketplace, the service becomes less valuable to you.
>Also, newspapers have a mix of subscription and ads for decades,
Substack's business model is predicated on its dissimilarity to existing publishing forms. By choosing their own subscriptions and receiving them in their inbox, a Substack customer is doing the complete opposite to going out and buying a particular broadsheet printed by someone else. I doubt any Substack customer who is paying for an ad-free experience would appreciate the comparison to a newspaper.
Edit: In their FAQ they say:
> Substack is entirely focused on subscriptions, so we don't build any additional functionality to support affiliate links or advertising, but you are free to use them.
> How does Substack make money?
> Substack takes a 10% fee on all paid subscriptions. Substack will never run ads or sell user data.
The site hosting the article isn't substack nor is the article a condemnation of advertising.
I haven't used Substack's creator software so not certain if they offer more value than a payment process (or even a vertical-bank designed for creators) would. But neither of those would charge 10%.
Do you have any wonky extensions?
A previous discussion can be found here[0] with the statement by archive.is here[1]