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Comment by happytiger | Hacker News Reader

Paying because a service is making itself suck on purpose to create “fake value” to make you relent to their suckage is objectionable business practice, and all those that support YouTube by buying premium need to think a little deeper about the kind of future their are supporting with their money: you’re paying for pain relief instead of innovation and, frankly, condemning the Internet.

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You are missing something key. There is a very popular strategy that YouTube and Uber and a bunch of other companies followed. If you have a product with network effects you don't sell it for what it's worth right away. First, you heavily subsidize the price to maximize your user base, only then do you start charging what the product was worth all along. You got convinced that the unreasonably good initial offering is the norm and resent the inevitable switch to the sustainable real offering. That makes sense, a lot of people will be in your boat as that is basically the entire point of the strat, get you to join the nework by giving you a false impression of the service / product. I'm sure there is some greed there too, but it's not fair to ignore this part of it. Yes, they are making the service worse in order to make more money, that is a fact, however I think some / most of that is needed to cover costs and was planned from the beginning. The argument should be what fraction is needed. Zero, as you seem to imply, seems clearly too low to me. Regardless, it seems best to evaluate a service based on how much you currently get from it for the price (and relative to current competition) rather than to what you used to get for the old price. I get so much value from YouTube that I do not mind paying for Premium. Yes, it is now a much worse deal than before. I think it is still a very good deal.

> First, you heavily subsidize the price to maximize your user base, only then do you start charging what the product was worth all along.

More and more I feel this should run afoul of anti-trust laws. It's one thing to subsidize a product short term. It's another to subsidize a product for years upon years so you can squeeze out any competition in the market. In the example of Uber and Lyft, how many start-ups that weren't flush with hundreds of millions of VC cash completely failed or never even got off the launchpad because there was no way for them to compete against a company selling it's services at a loss for years at at time?

I'm not an attorney, but have sat through many sessions with our legal team in the past on this topic (pricing models). Agree the practice may fee icky, but I'm not sure this case would qualify as anticompetitive (in the US). First, lawyers would have a field day at defining and redefining the market. Related, it is unclear what other services we as consumers no longer have access to due to them executing this strategy. So across consumer harm, market power/monopoly, and predatory pricing the legal case might be challenging to construct. Back to your point, maybe this practice SHOULD run afoul with anti-trust laws, but the laws may need to change to apply to this situation.

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