This argument is simply a scare tactic employed by monopolies of every kind. "Too Big to Fail" banks say the economy won't exist without them. The MPAA claims art won't exist without them. Advertisers say internet content won't exist without them.
You're missing the point. You fail to grasp the scope and size of the reach that ads have on the internet. I saw what the internet was like before the masses arrived, I was here online back in 1995 and while the lack of ads was nice, "the internet" was a ghost town. Those sites wouldn't, couldn't exist without ads. Hell, google isn't a search engine, it's first and foremost an ad company. That's where 95% of their revenue comes from! Their search feature is just a vehicle to display ads. Literally.
> This argument is simply a scare tactic employed by monopolies of every kind.
Except it's not a scare tactic and it's not an argument, it's a fact. Even if it it was both, it doesn't make it any less true. Advertisements actually do spur innovation and there's tons of data and studies to back it up:
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