Man, I wish Facebook would just charge $25 a year and then focus on making the actual user the customer, rather than making the end user the product and advertisers the customer. If they did that, there would be no more advertising, no more creepy selling of personal data, no more spamming my feed with "Susie likes Walmart" messages. On the plus side, if they fail to make the end user the customer, maybe a business opportunity will open up for someone to create a social network that isn't evil ...
No one (or close enough to make no difference) would pay. Seriously, people may complain about ads but they have almost always proven that they prefer ads to paying, hence the reason the vast majority of media channels (tv, print, web, etc) are free with ads, or cheap and ad-subsidized. And not having 80-99% of people I want to friend (because they dont want to pay) would be death for a social network.
Now you mention it, it's kind of surprising that they don't offer premium accounts with no ads and strong privacy guarantees. I might even get back on facebook if they did that.
The freeness of tv is a relic of the broadcast era when it was impossible to charge for TV usage. People now pay for cable, and people long paid for print. People also pay for iphone apps. I think the freeness of the web is due to an accident/stupidity of the web browser creators in not building an easy, automatic payment system into the web browser itself, thus creating a considerable penny-gap problem.
People don't really pay for print. Generally speaking, the fee that most print publications charge is more about qualifying their readers for advertisers (e.g. people who will pay money to read about X) than anything else.
Not sure who down-voted you, because while I generally disagree, you make a really good point...why the hell haven't browser makers built an integrated payments platform? They're probably better positioned than almost anyone to do so, and it would instantly turn all Safari, Chrome, and IE from weird strategic products into cash machines. And it would free Firefox from relying on the search engines for their revenue.
The majority of cable channels still have tons of advertising; consumers are paying for the channel, but I doubt the subscription fees are the majority of the revenue for the channel.
Regardless, it's a very different issue if your core value proposition is "using this is super useful and awesome because everyone you know is also using it". What would be the optimal pricing model for a TV network that was exponentially more enjoyable the more people were watching it? $0.
Doesn't matter. Even if the cable companies simply exchange your money for one dollar bills and burn them, you're still giving them money. So it stands to reason that if you can get people used to paying for individual online services (like they do for HBO on their cable), then it is not required that things be ad supported anymore.
I think the reason things are ad supported is because making money from advertising is really simply. You need one person at your organization to call an advertiser, and a day of his work can give you millions in instant cash. Customers, on the other hand, require a lot more maintenance and generate less money per individual, so scaling up a business based on customers paying money is very difficult. (Even Microsoft, a huge company that sells software, prefers to get OEMs to buy you a Windows license. One deal with one OEM equals millions of dollars. One deal with you equals $39.)
So it stands to reason that if you can get people used to paying for individual online services (like they do for HBO on their cable), then it is not required that things be ad supported anymore.
Advertising isn't required; lots of services do fine without it, even some free ones that make money through other methods. I'm just saying that in general people seem to prefer paying with their attention to paying with their cash. If you can somehow shift that balance, then yes, advertising could go away. But I don't think that will ever happen, because people just don't value their attention and time like they do their cash. I think it's a side effect of human nature somehow.
Among other things, because cable does a great job of obscuring what they're paying for. Bundles with Internet, phone and/or DVR service, time-limited promotions, ...
