Commentary

An Ad-Blocking Idea That Pays Off For Web Sites

This is the season for goodwill toward people everywhere, so I hope good things for a plan by Optimal.com to charge consumers a monthly fee in return for the right to skip ads on Web sites.

The nice idea is that by paying a little, users get to avoid annoying ads of all descriptions but still help support the good, hard work of the people who create it. And those people would get a percentage of that monthly fee, calculated by how much each subscriber spends where. Users will even get a dashboard to find where their monthly fee is going.

It’s a nice idea, and I don’t hope if fails. I believe that most people are fair and understanding, or at least enough of them are that you can depend on their basic goodness. You can fill in your own attitudes about that. I also believe habits die hard; online users used to paying nothing don’t want to rock that boat.

On the upside, I may be wrong about that. YouTube Red, the new pay version,  is seemingly just a guzzied up version of free YouTube, but it’s a lot more, of course. Because YouTube has such a massive base, it only needs a relatively small percentage of them to subscribe to be successful. Hulu also offers ad free and otherwise versions. According to a Business Insider story about the Optimal plan, founder and CEO Rob Leathern, envisions a monthly fee that would be less than $10 which puts Optimal in the category with other pay providers.

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For a story in Forbes, Leathern was less specific but explained how he thinks the subscription fee should be deduced.  Wrote Robert Hof, “He would arrive at an average figure basically by dividing the entirety of display ad revenues in the U.S., where Optimal is starting (that’s $27 billion in 2015, according to eMarketer), by the number of people online (let’s say 300 million), to determine how much each person’s worth in terms of ad revenues. My math produces an even $90 a year per person. Leathern says that’s not a bad guess, though some could pay less and some might pay more.”

That depends, Leathern said, on whether some uses would go for some limited hangout -- just a few ads, as in the Hulu model, basically. Hulu mimics how cable networks finance themselves: They sell ads and they charge cable operators a monthly fee. In the Hulu version, you’ve just become a cable operator.

(Wben DVRs were new, Jamie Kellner who was then CEO of Turner Broadcasting, suggested that consumers who wanted to zip through ads should pay a few hundred dollars a year to compensate, squeezed out, perhaps as a tax on DVR units. That went nowhere.)

Maybe Optimal's volunteer system works, but as long as you can block ads without penalty, that leaves quite an escape plan. Listeners provide 34% of NPR's funding, but as you know from those endurance contests called membership drives, only a very small percentage of all listeners give a dime, and no number of tote bags or subscriptions to Wine Spectator seems to change that too much. 

I do have a suggestion: If Web sites could explain how their money is spent, I would understand more. The two models of the Internet office that I have is  1) free lunch/ happy hours on Friday/stock options that are making everybody a millionaire or 2)  a bunch of college kids wearing black, who make nothing at all and think that any alternative to that will ruin them.

You want to know how confused that image is? Read Gaby Dunn’s lament about the illusion of wealth many YouTubers have to deal with I wrote about earlier.

In a medium that values full transparency, how about a Website that lays out its finances? Tell us, right on the site, so a visitor gets a glimpse at how those ads really, really do keep the lights on, or that convinces us paying a little bit to be there is not just the right thing to do, but actually necessary.


pj@mediapost.com

1 comment about "An Ad-Blocking Idea That Pays Off For Web Sites".
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  1. Jack Wakshlag from Media Strategy, Research & Analytics, December 18, 2015 at 4:29 p.m.

    So the entire ad inventory of the internet is only $90 per user?

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