The issue however is that the users advertisers care about are the ones with disposable income. The users most likely to opt out of ads are the ones with disposable income. Thus the marginal cost to Facebook from such users is significantly more than $9/quarter.
>> That is how it is today. But does it have to be like that ? What is the minimum revenue per user required for service like FB to run.
> Minimum doesn't matter, the only question is if it's more profitable than the current approach.
Only if you think strictly inside the box.
The real problem here is one is a misalignment of incentives: Zuckerberg is managing Facebook to maximize the metric he's being evaluated on (profit and wealth), not the value provided to society.
I'd start with treating users as partners, and not cattle.
Which is my point. It's easy to say "just force them to optimize for value to society" and then ignore what that really entails in practice. And what giving someone the power to do that tends to cause.
Actually solving the related problems and making things actually better is probably possible but it's messy and hard and complicated.
> Actually solving the related problems and making things actually better is probably possible but it's messy and hard and complicated.
What you describe is politics, and it's inescapable.
What does this mean in practice? How do you treat 2.6 billion people as partners?
They probably could. As they could also charge you a premium and then profit two times on top of you — with your fee and then by selling your data to third parties. Why? Because who would know that was happening? Corporations have no moral compass dictating their actions. The bottom line being what's best for investors.
20 million for YT @ 5$/month is more than 1 billion in revenue per year. Given that 20M is just 1% of the user base , there is probably not a lot impact on the ad revenue either.
It is not either free or paid , it can be both . It satisfies a need for the people willing to pay for the privilege of not seeing ads and gives additional revenue even.
No radical business changes required only a ideological change to treat their users as humans in required from FB
While everyone is sceptical on whether such a service can reach critical mass to make financial sense, a brand new FB replacement may not be able to do it, However FB itself can certainly give that as an option without hurting their revenues substantially.
I was sceptical on the value prop for Youtube Premium, I am constantly surprised how many people pay for it, if google can afford to loose ad money with YT premium, I am sure FB can build a financial model around a freemium offering if they wanted to.