> unintended externalities

You're correct to criticize advertising, but I also want to push back a little bit on the "utopia" of paywalls as a funding method for the web.

There's a difference between paying for content creation and paying for content itself. Content creators and their time are actually scarce resources, even online. Content itself is not a scarce resource; once something is created it becomes abundant. So both IP laws/paywalls and advertising are attempts to monetize and artificially restrict/control some other abundant and/or uncommoditized resource instead of engaging with the actual scarce resource/activity that we care about incentivizing.

As such, both advertising and IP-enforced pay-for-access models have negative externalities that arise from them being indirect monetization models. With advertising, we deal with negative externalities such as privacy violations and clickbait. With pay-for-access models, we get externalities like DRM, SaaS, endless content recycling, and a general lockdown of culture itself.

With both payment schemes, we are ignoring the actually scarce resource that is actually in real demand by the market: creators and time. But instead of trying to come up with schemes to monetize that and instead of trying to imagine what a market based on creative/useful output would look like, we've instead become obsessed with making other resources artificially scarce or artificially commoditized. We fight against technology and human nature itself instead of thinking about how we can fund the real scarce resources that still remain.

This could be a longer conversation; there are multiple theories about how to pay for creation, and a lot of debate about what models are sustainable there. Too long of a conversation to get into right here. But the really short version of this conversation is that you are very correct to look at advertising as an imprecise, indirect way of measuring value, and you are correct to point out it has a lot of negative externalities. But you're making an assumption that pay-for-access models haven't had their own negative externalities, and I don't think that assumption holds up. I think we've seen a lot of suppression of innovation and general culture because of our current funding model for IP. Of course a theoretical Internet where people paid for content access would have turned out different; but would it have been better? I don't think that's a safe assumption at all.

At its worst the current pay-for-access model sometimes decreases the creation/availability of content because it incentivizes recycling and restriction of existing content, and restricts other creators from building on top of and preserving existing content -- essentially denying a universal human instinct that has been around for almost as long as humans have existed.

There isn't an easy answer about how we should remake a content economy in a world without digital scarcity (ask Open Source devs how hard this is), but recreating digital scarcity and pretending that we're still in the old system probably isn't the right way to move forward. We should try to consider how people can more directly pay for the resources that are actually scarce: not content itself or the bits on your computer, but instead content creation and maintenance and the people who are able to make the things we care about.

The more directly we monetize resources that are actually scarce and the less that we rely on indirect models of monetization, the fewer surprising/negative externalities we'll see in the long run.