It has worked for several years. So why not?
At the very least, it seems obvious that it's unsustainable and likely that creative artists will be the first squeezed.
It's unlikely this would ever happen. But mostly, I'd be fine with embedded ads if they were used responsibly. But, according to Wikipedia, Spotify was founded over 10 years ago. In 2017, it was reported that it was still not profitable despite its subscription models: https://www.bbc.com/news/business-38930699. Last year it launched an IPO. So somehow, Spotify magically became profitable enough to launch an IPO or it lasted over 10 years from what looks like VC funding without being profitable and is still not profitable. That leaves only one question, how does such a business survive so long without profit and did VC's really care considering how popular the platform is.
Please correct me if this is disingenuous, but I feel like you basically just said you're used to having VCs subsidize your entertainment platforms and that you've extrapolated that entitlement into a justification for never paying for any entertainment acquired over the Internet.
At the very least, it seems obvious that it's unsustainable and likely that creative artists will be the first squeezed. Also, I don't think this explanation combat's the parent's observations about spending habits at all.