Jeff touched on this, but I want to underline the point more strongly: How do the sharing platforms themselves (Reddit / YouTube / etc) exist without ads? To be clear, I’m no fan of the audience-distorting incentives of ads… but the infrastructure for free content isn’t exactly free, either, and we need to pay for that somehow or else that otherwise-funded content doesn’t get distributed (and then the lack of distribution inherently prevents donation / patronage models from working). I’m having trouble seeing another realistic way for that to work?
We could look at Substack‘s model and say that the donation/patronage mechanisms should get subsumed by the distribution platforms, who’d take a percentage off the top of that revenue. If there are enough donations then they can afford to support the platform. As Jeff says, we’ll see how that works out for Substack; in theory it seems like this model could work, but as of now Substack is still losing millions per year. As for your other mentioned platforms: At a glance, it seems pretty clear that Reddit (which has platform-supporting ads) is still losing money (given that they were losing money the last time they shared info in 2021, and are now studiously avoiding all discussion of profitability while ostensibly preparing for an IPO), which helps explain their motivation for shenanigans like the current API pricing fiasco. YouTube is the one site of the three that is making money, and it probably only became outright profitable in the pandemic era as they increased their already-high ad loads (and expanded supplemental product lines like YT Music and TV).
YouTube lost money for a long time. It’s questionable whether it was even bought for financial reasons rather than influence and data collection reasons.
Reddit made $100M in ad revenue in 2019, increasing to $500M in 2022. Their owners pushed for rapid growth for an IPO even if the revenue increase would be temporary. If they’re losing money right now, they’re overspending.
If public goods are supported by small donations despite platform fees, I think the government should get involved. I think the US government should run a YouTube, a Substack, a Patreon, and a Reddit.
Jeff touched on this, but I want to underline the point more strongly: How do the sharing platforms themselves (Reddit / YouTube / etc) exist without ads? To be clear, I’m no fan of the audience-distorting incentives of ads… but the infrastructure for free content isn’t exactly free, either, and we need to pay for that somehow or else that otherwise-funded content doesn’t get distributed (and then the lack of distribution inherently prevents donation / patronage models from working). I’m having trouble seeing another realistic way for that to work?
We could look at Substack‘s model and say that the donation/patronage mechanisms should get subsumed by the distribution platforms, who’d take a percentage off the top of that revenue. If there are enough donations then they can afford to support the platform. As Jeff says, we’ll see how that works out for Substack; in theory it seems like this model could work, but as of now Substack is still losing millions per year. As for your other mentioned platforms: At a glance, it seems pretty clear that Reddit (which has platform-supporting ads) is still losing money (given that they were losing money the last time they shared info in 2021, and are now studiously avoiding all discussion of profitability while ostensibly preparing for an IPO), which helps explain their motivation for shenanigans like the current API pricing fiasco. YouTube is the one site of the three that is making money, and it probably only became outright profitable in the pandemic era as they increased their already-high ad loads (and expanded supplemental product lines like YT Music and TV).
YouTube lost money for a long time. It’s questionable whether it was even bought for financial reasons rather than influence and data collection reasons.
Reddit made $100M in ad revenue in 2019, increasing to $500M in 2022. Their owners pushed for rapid growth for an IPO even if the revenue increase would be temporary. If they’re losing money right now, they’re overspending.
If public goods are supported by small donations despite platform fees, I think the government should get involved. I think the US government should run a YouTube, a Substack, a Patreon, and a Reddit.