one of the other head-exploding experiences from that startup was when a major cell-phone company sat down with us and said, we have an idea: the ad-free cell phone. What if, every time a website would normally show an ad, we just paid them not to, at about the same rate the ads are paying. How much would that cost?
and the answer is: not much money at all. we ran the numbers and a typical user’s browsing was worth something like $20/month total across every site and every app combined
but no one can figure out the logistics, so we’re stuck with ads
That is a really interesting idea! I immediately see some problems, and you probably already thought through these while working on it, but I'm curious to hear if there were good solutions, or if they were non-issues for some reason:
- If it's a niche product, you can just "buy out" the ad space on the website. But if the phone becomes popular enough that the majority of a website's ad revenue comes through this route, there starts to be a bit of an extortion-like opportunity for the website owners. The website has an incentive to show _even more annoying ads_, with the knowledge that most users actually won't see the ads, but they'll still get paid as if they did. They can say "oh, we're adding 5 more banners, so you'll need to pay us 5x the amount you used to"
- I also see problems from the other direction (from the companies purchasing the ad space). By paying a website _not_ to show ads, you're essentially buying ad space. But the other purchasers-of-ad-space will still exist, and will now be competing for a more limited amount of space. So prices should rise, as demand rises. And as prices rise, you'll have to pay the websites more to keep them ad free. This should converge to a new equilibrium eventually, but I wonder if you accounted for that? If you get significant market share, the new equilibrium would be really expensive, because you're essentially trying to out-purchase everyone.
and the answer is: not much money at all. we ran the numbers and a typical user’s browsing was worth something like $20/month total across every site and every app combined
but no one can figure out the logistics, so we’re stuck with ads