The rest of the Web pays for Google and Facebook

scrambling to make ends meet.

Advertising was always more lucrative than simply selling to consumers. Back in 2006, the New York Times charged readers an average of $534 for a subscription, while it brought in a further $1 064 per subscriber from ads. Papers rarely had to increase their newsstand prices because they were able to eke out more money from advertisers instead, often well ahead of the pace of inflation.

Now that privilege is reserved for the tech giants. Since 2017, Facebook has almost doubled its average revenue per user in the US and Canada to $159/year, by serving up more ads and increasing prices when it needs to. Analysts expect Facebook’s total revenue to more than double again to $176-billion by 2024.

From a consumer perspective, you could argue that search and social networking should be free — after all, they are utilities that practically everyone uses — while more specific services should have a price tag. Twitter’s Super Follows and Substack, which offers subscriptions to individual writers’ newsletters, lets you pay for what you want: Where one person might be willing to spend on someone’s tweets about currency trading, another could choose to pay for a newsletter dedicated to gluten-free cooking.

This system might be more efficient, since you are theoretically only paying for the media you want, but that doesn’t mean it will be cheaper for consumers. The rise of video-on-demand services like Netflix and Disney+ has demonstrated as much. People who cut the cord on traditional pay-television packages have learnt that the new normal of multiple subscriptions isn’t necessarily any cheaper than the old world.

Yes, you get better, more convenient and largely ad-free viewing — but there’s a good chance you’re paying more for it. The same applies to Twitter and Substack, where signing up to just four writers’ output at $5/month each is already more than the cost of a $17 New York Times subscription, which gives you a greater breadth of coverage.

Super Follows are only likely to be a small part of Twitter’s business, at least at first. But taken in concert with the rise of paywalls, subscription streaming and video-on-demand, the fact that even a new-ish media company like Twitter needs to add a paid layer points to a world where everything aside from Google and Facebook has a cost of entry.

That might not be a bad thing, but we should recognise the trade we’ve made from ad-subsidised media to ad-subsidised search and social networking. Perhaps now we can forge a better understanding of the value of content. It costs money to produce, so it should also cost money to consume. — (c) 2021 Bloomberg LP