I'm curious whether advertising or paid usage has the higher potential profit. You can look at it as a mostly closed system. Users buy the products, ultimately paying for advertising.

Alternatively, if VCs/failing companies pour money into advertising that fails, this money does not come from users. In this scenario, users get content for free and, combined with the above, the total potential profit of the system is greater with advertising than without.

Advertising both alters what people buy and gets them to buy more.

As a result, I suspect that even if users are willing to pay for content, the potential revenue in a system that uses advertising is greater. This makes it a rather intractable problem in an unregulated revenue-maximizing capitalist society, requiring both an attitude change from consumers along with regulation.