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ads have two functions: to drive more traffic, and to preserve mindshare for existing brands. Coke is not buying ads because you don't know what Coke is, Coke is buying ads so that Pepsi or somebody else's ad doesn't take your mindshare away.

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Right, but neither of these functions explains the circularity: if Netflix loses money on every paying subscriber versus the "ad watching sucker" demographic, why spend billions of dollars a year[1] advertising your paid plans?

(Maybe I'm being too literal here -- it'd be fair to argue that Netflix mostly just advertises their shows, not the plans themselves directly.)

[1]: https://www.statista.com/statistics/688525/netflix-ad-expens...

Some advertising of the ad-free paid plans is good because it takes the segment of customers who will not tolerate ads and gives them an option, rather than lose them.

Where do they say they lose money on ad free paying subs? Maybe they make less profit than on free ad users.

Sorry, bad phrasing -- they don't lose money in an absolute sense, but make less on full-paying users than ad-watching ones.

media is always about network effects. you want to talk to your friends about big shows. that only works if they watch the big shows, ad-free or not.

Reminds me of the mindblowing album Dispepsi by Negativland: https://www.youtube.com/watch?v=b8S3xlIXObA

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