The era of ad supported services is coming to an end (and that's a good thing).
The era of ad supported services is coming to an end (and that's a good thing).
Services like Substack, Locals, and Twitter (seriously) are leading the way.
Ad-supported services have been the driving force behind the current era of the Internet for the last two decades — and they’ve been gosh-darned successful.
Ridiculously popular online services — from Twitter and Facebook to GMail and YouTube — have become household names thanks, in large part, to offering their services completely free in cost. To utilize those services, a person didn’t need to pay a single cent. People like free things!
The bills for developing and running these services have been paid, more or less, almost entirely via advertisements.
Now, in 2023, that era — the ad-supported Internet era — is coming to an end.
Paid and subscription services are on the rise, and existing ad-supported services are quickly making the transition to a paid system as well.
And I couldn’t be happier about it.
Ads make you the product, not the customer.
In any business, there are two critical components:
A product (the thing being sold)
And a customer (the person paying for the product)
Now. Ask yourself. What is the product of YouTube?
“The product of YouTube is obviously the videos,” many would say.
Ok. If that’s the case, tell me this… are you paying for those videos? The answer, for the vast majority, is no.
Which means that the product of YouTube is not the videos. In fact, if you look at the yearly revenue of YouTube, it becomes quickly apparent that there is only one group of customers paying money to YouTube… advertisers.
And what product are these advertisers paying for?
You. They’re paying for you.
Your information. Your time. Your attention. You are a product being carefully cultivated, manipulated, and sold to the highest bidder.
Like cattle.
The exact same is true of every single ad-supported online service in existence. Google Search, GMail, Twitter, Facebook, nearly all publications, and so many more.
Beyond the simple fact that I don’t like thinking of myself like cattle — and idea which makes me downright grumpy — there are real, practical reasons this arrangement is a problem for us (the cattle).
A business is going to design a product to cater to the wishes and needs of the customer. Which means services like YouTube will focus on building things which advertisers (their customers) want… even when it harms us humans (their products… their cattle). This includes the YouTube recommendation algorithms, YouTube censorship, and many other “features”.
The more you think about the ways ad-support services are designed to treat you like cattle… the more infuriating it gets. Every Google Search. Every Facebook post. Every YouTube view. Mooooo.
But it’s not all bad news. Because the end of the “ad-supported era” appears to have arrived.
The rise of paid services.
The only way to fix this truly awful situation is to do some very simple (but very intimidating) things:
Remove advertisements from the services.
Stop treating the users (us) like the products.
In the case of YouTube, that would mean a complete change to how they approach their business. They would need to begin treating the videos like the products — which means more direct forms of monetization: Selling individual videos, subscriptions, and the like.
For services without a clear, traditional “product”… that would mean getting a little more creative and treating all (or a portion of) the features of the service as the product to be sold.
The good news is… this is happening. Rapidly.
Several companies are building services which offer completely ad-free services… and provide the ability for content creators (writers, video creators, podcasters, etc.) to monetize their creations without the need for a single advertisement.
Substack, which provides an ad-free platform for written publications, has focused on building ad-free, subscription revenue models. Recently, Substack has expanded into video and podcast publishing as well… steadily chipping away at the need for “ad era” services such as YouTube.
Another ad-free publishing platform, Locals, has also focused on providing paid subscription services for similar types of content as Substack (articles, podcasts, and videos)… with more of a focus on community interaction.
And both of these services appear to be gaining significant traction.
Note: The Lunduke Journal uses both Substack and Locals. Because these are exactly the kind of services we, as human users of the Internet, need in order to not be treated like cattle.
But it’s not just these newer companies providing ad-free services which signals the end of advertising supported services…
The ad-supported era is coming to an end.
Twitter, which has long been almost entirely funded by advertisements, is rapidly making the transition to paid services.
The “Twitter Blue” service — an $8/month subscription — has been heavily pushed by the current Twitter leadership as the future of the platform. Pay some money and get extra Twitter features… and see less advertisements in the process.
In addition, Twitter is now providing the ability for Twitter accounts to offer paid subscriptions of their own — in what appears to be an attempt replicate a portion of the functionality that other subscription services (like Substack, Patreon, and Locals) provides.
The fact that Twitter — one of the most prominent, ad-supported online services — is attempting to quickly play catch up with services that do not use advertisements in any way… is incredibly telling.
As of right this moment, advertisements are still (in all likelihood) the primary source of revenue for Twitter. But those days are clearly numbered.
The industry trend appears to be away from ads, and toward subscriptions. Both new companies and long-standing Internet services are moving in that direction. Even YouTube is toying with subscription options with renewed vigor.
Are advertisements going away entirely? No. The reality is that some of the largest Internet companies are still predominantly ad-supported (such as Google)… and even Microsoft is now including advertisements within Windows itself (which is insane).
But the trend is good. And the era of advertisements being the driving force of Internet services appears to be ending. Which means the days of us all being treated like cattle are numbered.
I wish it would happen a little faster… but I’ll take what I can get.
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