Citation please? There are many "internet businesses" that don't derive their revenue from advertising, e.g., AWS, Dropbox, Netflix. Spotify derives some revenue from advertising, but their core business is subscriptions. ad nauseum
Also, those paid-for services you mention are of such high quality (to you, not advertisers) because you pay for them. You are the customer not the product, as they say.
Many people pay for Hulu and many other services, and still get ads, how are they not the product?
That cliché can't die soon enough.
Hulu is an example which mixes both approaches - clearly an $8/mo premium subscription isn't enough to support their business model, so it has to be supplemented with ads. Not sure why this needs explaining. TV is obviously an industry very tightly coupled with ads, making it more difficult to disrupt with a fully ad-free approach.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
The cliché is an excellent guide to the situation. So many people don't seem to understand why ad-supported businesses work they way they do, and in particular why they don't seem to have the customer's best interests in mind.
So it's not "if you're not paying for it; you're the product", it's "if you're not paying and the provider is a business, you're the product". And then we're just missing a truckload of exceptions, instead of two truckloads.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
People pay a lot to Comcast every month, does that mean they get plenty of respect?
Comcast is a fine example of something where you're the product even if you're paying for it. (Note that "if you're not paying for it you're the product" doesn't have anything to say about the case where you are paying.) Monopolies and oligopolies basically get to treat customers like property, because they know the customers don't have much real choice. Comcast is exactly what I had in mind when I said it depends on the industry.
There's nothing wrong with free, as long as it's truly free. Ad-supported services have huge costs that we all pay for as I explain in detail in my linked comment.