The original deal

For most of the internet's history, there was a simple arrangement. You use the product for free. In return, you see ads. The ads pay for everything. You don't pay money. You pay attention.

Google Search worked this way. Gmail worked this way. Facebook, Instagram, YouTube, Twitter. All free. All ad-supported. Your data was the price, and the ads were the delivery mechanism.

"If you're not paying for the product, you are the product." Everyone repeated that line until it became a cliché. But it described reality. And reality had a clear structure: two lanes. Free with ads, or paid without. Pick one.

Spotify Free had ads, Spotify Premium didn't. YouTube had ads, YouTube Premium removed them. Netflix was ad-free because you were already paying. That was the pitch. The whole pitch.

How ads on paid subscriptions became normal

Somewhere around 2022, the model started shifting. Netflix introduced an ad-supported tier. A cheaper option with ads. That still made sense. A third lane, not a replacement for the existing ones.

But then the paid tiers started getting ads too. Amazon Prime Video added ads on paid subscriptions in early 2024. Existing subscribers woke up to commercials they hadn't agreed to. If you wanted the ads gone, you had to pay an extra $3.99 per month on top of what you were already paying.

Disney+ followed. Hulu followed. Peacock followed. The pattern became clear: introduce ads on paid subscriptions, then create an even more expensive tier to remove them. The "no ads" experience that used to be the default became the premium upsell.

This is not a small shift. Ads on paid subscriptions fundamentally break the original deal. You're no longer choosing between free-with-ads and paid-without-ads. You're choosing between paid-with-ads and paid-more-without-ads. The free lane disappeared, and the paid lane got ads anyway.

YouTube's escalation

YouTube has been increasing ad frequency for years. More pre-roll ads. More mid-roll ads. Ads on channels that aren't even monetized, meaning the creator gets nothing while viewers get interrupted.

Then YouTube introduced Premium Lite. A cheaper subscription tier that still shows some ads. You pay money, and you still see ads. Just fewer of them. The product being sold is literally "fewer ads," not "no ads."

For creators, the economics are equally frustrating. YouTube runs ads on paid subscriptions and on free accounts, takes its cut, and the creator's share keeps getting smaller relative to the platform's total ad revenue. I wrote about YouTube's ad strategy in more detail, and the trend has only accelerated since then.

Ads inside Windows

Microsoft might be the most extreme example of ads on paid subscriptions. Except it's not even a subscription. It's a product you buy outright.

You purchase a Windows laptop. Brand new. Hundreds of dollars, often over a thousand. You turn it on, and Windows shows you ads. In the Start menu. In Settings. On the lock screen. In notifications. "Suggestions" that are ads by another name.

There is no premium tier of Windows that removes this. No "Windows Pro without ads." You pay for the hardware, you pay for the operating system (bundled in the price), and you get ads. On your own device.

This is different from ads on paid subscriptions in streaming because there's not even a theoretical opt-out. You just get ads. Microsoft, a company valued at over $3 trillion, puts advertising inside the operating system it already charged you for.

The tracking never stopped

Here's what makes ads on paid subscriptions worse than the original model: the tracking didn't go away when the payments started.

The original deal was: you get tracked, you see targeted ads, you don't pay. Privacy for free stuff. A trade.

Now you pay and you still get tracked. Netflix's ad tier tracks viewing behavior for targeting. Amazon tracks shopping, streaming, Alexa usage, and browsing patterns across its ecosystem. Google knows what you search, watch, email, and where you go physically.

Paying for a subscription didn't buy privacy. It bought the same product with a receipt attached. The surveillance continued. A new revenue stream was added on top.

Where this is heading

If the current trend continues, ad-free will become the exception rather than the default. Every screen becomes a potential ad surface. Cars show ads on dashboards. Smart TVs display ads before you open an app. Gym equipment runs ads between sets.

The logic is consistent: if a screen exists, it can show ads. If it can show ads, it will show ads. Nobody asks whether the person looking at the screen already paid for the device.

Ads on paid subscriptions are just the beginning. The model is expanding to every product with a display and an internet connection. The Internet of Things is becoming the Internet of Ads.

The alternative scenario is a backlash. More people moving to ad-free platforms, open platforms, and privacy-focused tools. Linux instead of Windows. Apple instead of ad-supported Android skins. Substack and Medium instead of ad-heavy content farms. Whether this actually happens at scale remains to be seen.

The platforms that still don't run ads

Apple doesn't show ads in macOS or iOS. The App Store has some promotional placements, and Apple News has ads, but the operating system itself remains clean. That's increasingly rare and increasingly valuable as a differentiator.

Substack doesn't run ads. Medium doesn't run ads. Both use subscription models where readers pay for content and the platform takes a percentage. No tracking for ad targeting. No interruptions.

For creators and writers, this matters. If you build your audience on a platform that runs ads on paid subscriptions, your readers' experience degrades over time as more ads get added. Platforms that fund themselves through direct subscriptions align their incentives with yours: better content means more subscribers means more revenue for everyone.

The counterargument

Content costs money. Infrastructure costs money. Without ad revenue, subscription prices would be higher. A streaming service that charges $10 without ads might need to charge $20 or $25 to maintain the same content library.

That's probably true. But the argument only works when ads are the alternative to paying. When ads on paid subscriptions become the norm, the logic breaks. Prices didn't go down when the ads appeared. They went up. And the ads showed up too.

The companies adding ads on paid subscriptions are not struggling. Amazon, Google, Microsoft, Disney. These are among the most profitable companies on Earth. They're not adding ads because they need the revenue. They're adding ads because the revenue exists and nobody stopped them.

The bottom line

The original internet deal was fair. Free with ads, or paid without. Two options. Clear trade-off.

Ads on paid subscriptions broke that deal. The new model is: paid with ads, or paid significantly more without ads. In some cases, like Windows, it's paid with ads and no opt-out at all.

For anyone building a business online, whether you're a creator, a writer, or running a small company, the platform you choose matters more now than it did five years ago. Platforms that don't run ads on their paying users are becoming the exception. And exceptions are worth paying attention to.

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