It is also quite disrespectful considering the tracking etc. that comes with it. How many more subscribers would they get if they didn't treat them as garbage?
This is based on other posts in this thread that talk about a $84/year subscription and $4-$15/year ad revenue. Since that was a reference to Facebook revenue, I imagine it would be a decent upper bound.
It reminds me of how people say that it's impossible to provide fresh produce without paying people below minimum wage. In lieu of common sense, it depends on numbers, which don't need to be precise, but you can't just handwave.
I'm inclined to believe the true story is simply, as others state, that no matter what the ad revenue is, it's X% more and nobody wants to give it up if they don't have to.
What’s more likely is that the subscription price does in fact cover costs and that advertising revenue is seen as a nice benefit on top that can be grown creatively without any accountability or backlash.
The problem is that web ads are nothing like that. They are orders of magnitude more scummy, can’t be vetted in advance and stalk the shit out of you in order to serve you “better” ads next time, whatever the hell “better” means in advertiser’s perverted minds.
The author thought he was doing exactly this and, consequently, will cease to be a paying subscriber for much longer.
The ads and difficulty in unsubscribing are the reasons why these organisations will never achieve a critical mass of paid subscriptions.
There are a lot of counter examples to this. Hulu, Spotify, Ars Technica, YouTube Premium, etc... People are willing and able to pay for ad-free content.
Revenue = subscriber revenue + ad revenue from ads shown to subscribers + ad revenue from ads shown to non-subscribers
The suggestions was to eliminate the middle piece and increase the subscription price to make up for it in the first piece. That's still leaves the last piece.
The above article also states that digital advertising revenue only accounted for 37 percent of total advertising revenue. So that means digital advertising revenue is at most 12% of total revenue. Furthermore, it is unstated how much of digital advertising revenue comes from paid subscribers vs unpaid visitors.
If we assumed, for the sake of argument, that half of digital advertising revenue was from paid and half unpaid, then cutting ads for paid subscribers would be doable with only about a 10% increase in price.