> No the people who pay the extra are the ones who are most able to afford it. The outcome is still the same though as these are the people the advertisers want to target.

Except that you can't get those people anyway because they value time more than money so they'll just buy some other content with no ads in it from someone else. Also, that doesn't matter if you just price the paid offering at the level that it makes up the actual ad revenue from the people who would use it.

> The people who can't afford the extra dollar are of very little value to the advertisers.

Rubbish. People are often budget constrained because they have high expenses rather than low income, e.g. anyone with kids. Being able to divert that spending to your brand from a competing brand has significant value to advertisers.