"Free" is a Compelling Price Point, But Subscription Models Gain Some Traction

Advertising always has been a primary method of defraying the “cost to consumers” of content, ranging from “free over the air TV and radio” to newspapers and magazines, linear video to web sites. Up to a point, consumers “prefer” lower-cost ad-supported content access. That now also applies to key applications ranging from messaging and email to search, social media and other consumer applications.

On the other hand, there has for several decades been an “advertising-free, subscription-based” access model of some importance for content and apps. “Freemium” models in the apps business and ad-free video channels provide examples.

The search for less-intrusive advertising models always is a concern, but some amount of advertising is key to defraying end user access costs. Use of ad blockers is one trend that undermines the model. Intrusive ads are another source of irritation.

But unless consumers are willing to pay the full cost of using media apps and services, some amount of advertising remains crucial. The business model is most clear for video entertainment and music, least clear for news content.

Though "nothing really is free," the prevalence of "no incremental cost" content and app access remains an unsettled issue.


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