To give the scope of where I am as a consumer, I’m in my mid-30’s, thus grew up during the rise of the advertising-supported internet business models primarily built in the early 2000’s. This very established business model extended from the television era, in which most obviously, programming was primarily made for viewership, and sports were (and still are) king.
To be clear, I view advertising as a necessity in our capitalist system, and a net good in its own right.
Along those lines, I recently finished “How The Internet Happened” in what was a fascinating account of the rise of the internet, especially how well it rhymes with the rise of Web3 today:
The key component of the development of internet-native business models such as Google, Facebook, and the like, was the discovery and hyper efficiency of advertising born from algorithms within those models. In most cases, the target consumer voluntarily traded personal information for social benefits, including me at the time.
So, services that would otherwise be paid for directly by the consumer, were subsidized by advertisers that benefited from a generally voluntary, albeit not always clear to the user, exchange of value.
One knock-on effect is a very large cohort of consumers are trained to enjoy “free” products, to then come to expect more and more of the same.
It led many to believe that they were the primary customer (the TV viewers, Facebook users, etc.) when they were not, the true value exchange was between the advertisers and the primary company.
Decades of this disconnect trained many people to expect more “free” services, but at a hidden cost. The services provided are not directly shaped by the end users, but the advertisers themselves. Through this lens, decisions that seem counterproductive to the end user, make perfect sense from the view of the actual customer.
This is the scenic-view-way of highlighting how we are not in the driver’s seat of value exchange in many of the products we consume.
Healthcare is a great example of how this disconnect has gone sideways due to the intermediation of governments and insurance companies between patients and doctors. The market signals of price and demand are severely muffled as the entity who ultimately pays the bills are never in the room.
It’s mainly why I pay cash at the doctor I’ve personally chosen for years, even while still paying my “healthcare tax” for the government-required insurance I never use. My healthcare is excellent because I directly pay for it, and the doctor is happy because they receive the price they demand for those services. If anything is off, whether on care or pricing, it’s resolved then and there.
As I’m writing this, I realized I recently did this at the dentist too. I cancelled my dental insurance to personally move to an all-cash system, which made me realize that the service I was receiving at my previous “insurance covered” practice was subpar. So, I took my business elsewhere to be very pleasantly surprised. Paying cash helped me see value more clearly, which ultimately led to being thrilled to pay for service at a different practice that was excellent.
Everyone wins.
Through this lens I believe, in as many things as possible, to pay directly for the things you value. What may feel “expensive” at first could be a consequence of having too many things we seemingly value subsidized by others for so long. Moreover, prices reveal how you personally value a product or service, which may mean eliminating it all together.
Two recent examples for me were choosing to pay for ad-free tiers of services that I find immense value in:
YouTube Premium and X Premium+.
It’s more than just a convenience of enjoying content on YouTube without the interruption of ads, but rather an acknowledgement that I’m receiving something I really value, and the peace of mind knowing that I’m paying what they ask.
YouTube Premium, if curated correctly, provides access to education and entertainment that no human being in all recorded history would dream of having access to.
I can’t believe it exists sometimes. However, curation is the key, it’s as trashy or useful as you personally choose it to be.
The same applies to X (formerly Twitter). I just upgraded by account to the highest tier because that platform provides direct access to the thoughts and insights of the most interesting people on the planet. Curation is necessary here too, so using the tools available like mute, block, “not interested” help the algorithm cater the best content to you.
Personal responsibility is required in both platforms, but if done well, man it’s just insane how great they can be.
Paying for what you value helps directly connect you and the service provider in a positive-sum relationship. I’m not convinced I would try as hard on the curation side if I wasn’t as financially invested.
Subsidization muffles market signals, with healthcare as the best example, over time makes things worse and/or more expensive.
It also clears the air as to what you personally value. If you had to directly pay for everything in your life, would there be things that you wouldn’t pay for? At the same time, there would clearly be things in which you’d happily pay.
In no small sense it slowly makes both customers and businesses better.
Imagine a world in which you were able to voluntarily pay for private services that your local government currently “provides” on an individual basis. Clearly those services would get better and cheaper over time, but that’s a rant for another day.
My overall view is that by taking personal responsibility to directly pay for things you value, maybe you help slowly tilt the world in a better direction. There are more choices today to take a “free” or subsidized path, but I’m of the mind that I must choose the other option, pay directly for services I value.
I wonder how much our collective thinking and market demand has been changed from receiving “free” things for so long?
What could things look like if we reconnected the market signals between customers and service providers?
On a small scale, how much better would it feel to directly pay for things you value?
Go find out.
Will