It is commonplace these days for observers to note that if a user is not paying for a product, then the user is the product. Sometimes that is viewed as a bad thing, but there is a bargain being struck here: users get value in exchange for being subjected to advertising.
And that is a time-tested value proposition. Users and customers get free or reduced-cost products they value for less money than would otherwise be the case.
Product | Form of Subsidy | Value for Users |
Free Online Games | In-app purchases, advertisements | Free gameplay, access to new levels/characters |
Free Mobile Apps | In-app purchases, advertisements | Free core functionality, additional features for purchase |
Free Video Streaming Services | Subscription model, advertisements | Free access to content, ad-free viewing option |
News Websites | Advertisements, paywalls | Free access to news content, in-depth articles for subscribers |
Social Media Platforms | Advertisements, premium subscriptions | Free connection with others, enhanced features for paid users |
Free Email Services | Advertisements, paid storage upgrades | Basic email functionality, additional storage and features for a fee |
Open-Source Software | Donations, corporate sponsorships | Free access to software, potential for customization and improvement |
In principle, other forms of subsidy, discounts or premium value also are common.
Product | Value for Users |
Wholesale Clubs (Costco, Sam's Club) | Bulk discounts on groceries and household goods |
Streaming Services (Netflix Premium, Spotify Premium) | Ad-free viewing/listening, access to exclusive content |
Gyms and Fitness Centers (Monthly Memberships) | Access to workout facilities, classes, and potentially personal training |
Subscription Boxes (Beauty, Food, etc.) | Curated selection of products delivered regularly, often at a discount |
Cloud Storage Services (Dropbox Plus, iCloud+) | Increased storage capacity for documents, photos, and other files |
Software Subscriptions (Adobe Creative Suite, Microsoft 365) | Access to the latest software updates and features, often with cloud storage included |
The point is that as much as some decry the use of advertising, sponsorships and memberships, these are simply ways of creating value for buyers, offering lower prices and discounts, free access or perceived higher value.
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