Google has shown that with enough scale, just running ads on a website is enough to keep the content free of charge. But of course, as with everything where money is involved, it went way too far. This limited the ad revenue, and so websites decided to add more ads.
To compound that, ads started paying less and less, so websites started chasing profits by making the internet worse for everyone.
Twitter’s revenue is 89% ads. It has existed for more than 10 years, and has never made any money. So even at that scale, ads are just not working to sustain a company.
All the changes Musk is making to Twitter, like firing most of the workforce, charging for the API, limiting the number of tweets, Twitter Blue, it’s all to try and turn a profit. So, the experience of Twitter is now ten times worse, because ads don’t work.
Now let’s look at Reddit. Reddit is about as popular as Twitter. And Reddit isn’t profitable either. They’re kept afloat by raising money from investors. And so Reddit charges for their API now. Reddit made their site worse for everyone: the regular users, and also everyone browsing the internet and landing on reddit to see a “this subreddit is private” message, making any web search ultra inefficient.
And we can also look at Youtube. Youtube is HUGE. And it’s hard to know if youtube is profitable or not. The consensus seems to be that it is, but the actions of youtube seem to indicate that maybe it’s not THAT profitable. For example, youtube seems to be planning some moves against adblockers. Youtube is also taking steps against third party frontends, like Invidious. They wouldn’t do stuff like that if profit growth was awesome.
I love alternative platforms, but they’ll probably never replace the giant ones: they don’t offer a business model for people to create content on them.
As a user, you probably don’t care about that. And the person running the instance of said platform maybe is ready to fund it out of pocket, but the people creating the content on these platforms? They’re not making money from them.
And so as ad-based internet models start dying off, I have a feeling we’re going to be faced with 3 options
First, the big platforms survive as-is with the ads, you can still have ads on your own website, but the platforms will start keeping more and more of the ad revenue.
This is where we’re heading now. People are tired of ads and their privacy invasion, and the over abundance of them, but platforms seem to think this is the way to go.
Second option, the big platforms and websites evolve to another model, like paywalling everything behind a paid subscriptions like Youtube Premium.
It would basically kill off an entire portion of the internet, but it probably wouldn’t be the worst portion to lose.
Third option, the big platforms and the internet as a whole can’t find a new model to replace ad based ones, and big platforms and big websites die off. Content creation becomes a hobby mostly.
This is probably the best outcome for the internet as a whole, as it would probably kill off most clickbait, disinformation, AI generated crap. We would have far less things to read and watch, but a lot of if would be higher quality.
Yeah, I remember when YouTube WAS just a bunch of people making videos as a hobby. It’s crazy to me that there are now people whose primary income depends on it. I’ve never viewed the Internet as something you should put down permanent roots in and get embedded like that, because whatever online service you’re using could be gone tommorow.