This is a competitive market. There are reasonable alternatives. Cost to switch is low. Economics 101 (literally that class!) says that the price in that situation is going to be based on competition (for the companies/producers that survive), and the price of the competition is $0.
(It's actually not, you're paying with slightly less personal data for Firefox than the alternatives, and there are substantial externalities like the effects of monoculture, but none of that is going to change the big picture.)
Not only are you not going to get a critical mass of people willing to pay, but also those who are willing to pay will feel massively entitled, and will abandon your product when it changes in any way they don't like.
The only way to make it work would be to provide some value that cannot be replicated by competitors, in order to add switching costs and reduce the fidelity of alternatives. And for that to be relevant to Mozilla, it must also be compatible with the mission of an open web.
Good luck with that.
I believe I am arguing that we underestimate the willingness of people to part with their money when there is a right product.
> Cost to switch is low. Economics 101 (literally that class!) says that the price in that situation is going to be based on competition (for the companies/producers that survive), and the price of the competition is $0.
Not sure whether we live in different times, but isn't the same with YouTube? The cost to watch is $0, and you can even watch it ad-free for $0 with a free ad-blocker, yet 50 million people still choose to pay $12/mo for YouTube Premium.
>Not only are you not going to get a critical mass of people willing to pay,
I think you are speculating, so let me speculate as well. If Firefox does not make a radical turn, it will become irrelevant in 3-5 years.
> but also those who are willing to pay will feel massively entitled
With YT Premium, the one thing I request is that the one killer feature that I pay for (no ads) works reliably. So yes, I can agree that users will feel massively entitled to get what they paid for, but that is up to Firefox to define and control.
> The only way to make it work would be to provide some value that cannot be replicated by competitors
I agree! Firefox lost a lot of the product innovation and leadership mindset it had until roughly 2010-2011. Bringing that back would help (and the right business model could do it).
> And for that to be relevant to Mozilla, it must also be compatible with the mission of an open web.
How does making Google a default search engine in Firefox help that mission? Firefox should do it because it believes Google is the best default choice for their users and the open web, not because it gets paid to do it (if compatibility with its mission is what Firefox is striving for).
Yes, because de facto YouTube has no viable competitors, so I am not feeling that analogy.
If I want to watch YouTube videos specifically, I have to go to YouTube. People don't use YouTube because they necessarily like the experience of how YT does things, they use it because it has the content users want. Browsers aren't like that. Both Firefox and Chrome on a high level provide the exact same content.
Sidenote: adblockers and such are nice, but, as others have pointed out alread, non-tech savvy users won't bother. And the situation on mobile devices and smart TVs (which account for a growing percentage of YT consumption) have a pretty non-simple adblocker story (or non-existent, if we are talking about using native YT app on a mobile network).
Isn't that more about information asymmetry than value proposition?
Blocking YouTube ads with the appropriate add-ons for free isn't necessarily that well known, except among the tech savvy.
While some tech savvy folks may choose to pay rather than use such add-ons is one thing, but the "great unwashed masses" don't have information about such add-ons, perhaps encouraging them to purchase something they wouldn't purchase if there was more perfect information availability in the market.
I'm not claiming that's the case, but it seems a reasonable supposition.
An excellent point. I mostly watch YouTube on a computer with ad blockers, and I also have a DNS-based ad blocker (Pi-hole). And the combination does block many ads, but other add-ons are required to block the video window ads as well.
I don't use YouTube enough on non-general purpose computer devices enough to care about that. As such, I didn't consider that as a reason to pay for Premium.
Thanks for expanding my view on this!
That said, apparently ~42% of global users[0] block some ads.
Given that there are ~4.6Bn users[1], of which ~1.9Bn sometimes use ad blockers, some 2.7Bn users don't use ad blockers at all.
50 million (although that includes YouTube Music subscribers as well as YouTube Premium) subscribers is a little more than 1% of total users and ~2% of users who don't use ad blockers.
I'd also point out that nations with higher per-capita incomes tend to use ad blockers less, which implies (again, I'm not claiming this to be true) that they may be less knowledgeable about ad blocking technologies.
It's not clear what the global distribution of YouTube Premium subscribers looks like, but it's reasonable to think that those with higher (and presumably more disposable) incomes would be more likely to pay for such a subscription.
I don't have any data to back up my hypothesis, as I can't find any published research into the tech savvy of those who pay for YouTube Premium vs. those who don't.
Even more, just because the absolute numbers (50,000,00 subscribers which includes 30,000,000 YouTube Music, and 2+ or 7+ billion in revenue, depending on if you count the 30,000,000 YouTube Music subscribers) are large, given the total population, they are a tiny group.
How many people use add-ons to block youtube ads? Who knows? Possibly Google/Alphabet, but they certainly aren't going to talk about that.
I want to be crystal clear that I'm not saying you're wrong, but the idea that there's a lack of information driving subscriptions to get ad-free youtube is certainly a reasonable one.
Perhaps that's a good topic for a master's thesis in psychology? Since I'm not a marketer or a grad student in Psychology, that wouldn't be something I'd do. Hopefully someone will.
[0] https://backlinko.com/ad-blockers-users
[1] https://www.oberlo.com/blog/internet-statistics
Edit: Added the missing link.
A reasonable point. And I don't necessarily disagree.
Although "Video of stuff I want to look at" may be more compelling than "some icon I click to view the intarwebz," when they see essentially the same thing unless they take specific steps to block ads/tracking.
And that goes double for Android phone users.
My hypothesis was orthogonal to your thesis, but I agree that the data I outlined certainly supports yours.
I disagree. 50M people (including myself) already pay $12/mo ($144/year) for YouTube Premium [1], basically so they do not see the ads even though a completely free alternative is available. (this also tells us you need just one 'killer' feature)
And a browser, executed right, is arguably a much more valuable product. It is where we spend most of our day in. It is what we use to work and create value for companies we work at. So 10M people at $5/mo should not require such a stretch of imagination. The only question is is Firefox that good as a browser right now, and what would need to change?
Besides what is the alternative for Firefox? What good does its leverage in web standards group bring it? Even at the price of free, it is losing tens of millions of users every year and the death spiral of user attrition will drive its market share to the ground eventually. It clearly signals a need for a radical turn.
[1] https://www.theverge.com/2021/9/2/22654318/youtube-50-millio...