My site has about 30k active registered users a day. The vast majority are long term members that have been on the site for years, so they're quite dedicated to the service. Even so, only about 50 of them pay to remove advertising.
It only generates about 15k a year in ad revenue. It's fairly low revenue because:
1. Users are spread around the world. This isn't a site with 70% US visitors.
2. The majority of users run ad block, and this continues to rise.
3. Ad rates plummet each year. I earn about 5x less on the site now, than in the past, with the same number of active users, and 3x as many advertisements.
I've tried all the major advertising networks. I setup header bidding and signed direct deals with large networks, such as AppNexus, Amazon, Yahoo, AOL, etc. At the end of the day, ads do not pay well for my audience.
Users can pay $3/mo to remove advertising. Yes, I'm aware that's $36/yr, when the average registered user is generating less than $0.50/yr in ad revenue. About 30% of paying users choose to pay higher than $3/mo for no additional benefit (they can pay any amount they wish). I also have some individuals that have paid thousands of dollars.
What would happen if I offered a $1/yr plan for an ad free experience, so it's more inline with ad revenues? I honestly don't know, but I would guess I would lose a few of the $3/mo paying users, and gain less than 100 users paying $1/yr, so it would likely be net negative.
This illustrates a bit the price discrimination "problem" that is solved via ads. With ads, higher-income people probably earn you more money automatically.
With the fee to remove advertising, you'd need to use all the price discrimination tricks to maximize revenue. E.g., have sales, have discount codes, etc., and it would still not be close to the price discrimination possible via ads.
I also wonder what the income of OP's bubble was when they were not paying for WhatsApp.
So you are overcharging paid users by over 500% and complaining that not many take that deal? See that's the problem with all these "people won't pay for ad-free services" arguments. It almost always boils down this kind of abusive pricing.
And honestly, what you could make from users through ads is not what I care about. You are making zero from me through ads because I block them everywhere and that is not negotiable. A reasonable price would be costs + modest margin not how much you could grab out of my pocket.
I'm a little confused where you're trying to go with this comment. I develop and maintain a service that has been used by millions of people. I make less net profit than a part-time McDonald's employee. Is this not "costs + modest margin"? Where is the abusive pricing?
