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Comment by ToucanLoucan | Hacker News Reader

The problem is: advertisers will argue that if you're offering a tier of service that removes ads, that's specifically going to be the most appealing to the group of your user-base that has the most money to spend and whom is most ready to spend it, evidenced by the fact that they have subscribed to your ad-free tier, and is therefore worth the most in terms of reaching with ads. Those people are self-selecting as the most responsive to being appealed to to buy things, which is what your advertisers want.

This is why the "subscribe to remove ads" thing never took off in a big way. Users love it, but advertisers hate it and it craters the value of the ad space you sell to whomever doesn't think it's worth it/can't afford it.

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YouTube and Spotify both do “subscribe to remove ads.” If they’re not big, who is?

You've got it back to front, mate. The concept didn't take off among services and smaller websites precisely because the advertisers won't pay nearly as much if you're doing it. The big players can do whatever the hell they want, what kind of company isn't going to advertise on the biggest platforms that exist?

I guess I don’t understand what “never took off in a big way” is supposed to mean if it excludes a bunch of big players.

YouTube Premium costs 90% as much as a standard Netflix subscription, but with one major difference: Netflix needs to spend ~17B on content per year to collect that $15.49/mo.

Youtube gets content for free and pays out a revenue share. If they also had to spend billions on content, they would have to charge more than $13.99/mo.

And YouTube’s content is far more interesting, useful, and entertaining. Hence why I pay for YouTube and don’t even use the “free” Netflix subscription I have with my cell phone plan.

Not sure what your point is besides YouTube’s offering being far superior both in terms of content and not showing ads when you’re already paying.

My point was that YT already charges a lot for content they get for free, and if they had to license/create it, they would need to charge much more. Spotify is partly owned by record labels, and they have other incentives that are affect subscription pricing.

Their subscription model is not really that comparable to other services that have high acquisition costs for content.

well it's not really "free" in that case, is it? The other issue is that those payouts vary a lot on whatever is ad-friendly and various other channel statistics we never see in public.

But yes, Youtube (to my charaign. There's loads of problems) is very much the "indie scene" in comparison, where it doesn't need highly produced million dollar sitcoms to bring in viewers.

This entirely depends on the subscription fee, doesn't it? The amount of ad revenue that the service is getting for you is limited, even accounting for the fact that as a paying user you might push the price of ads up a bit.

If you set the subscription fee above this value, you as a service will be better off regardless of the advertizers.

Surely in this reverse Catch-22 hypothetical anyone who is willing to pay to escape ads is therefore worth more, so they would need to be served fewer ads for the same income.

So the subscription should be free. And with less ads.

yikes. that makes sense for an advertiser but also fuck that.

> This is why the "subscribe to remove ads" thing never took off in a big way [...] advertisers hate it

My heart bleeds for the poor advertisers. /s

Actually, no it doesn't. Not even a little bit.

Not even a smidgen. If your business plan is built around advertising, I hope your business goes broke. On this, no compromises.

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