I'm not so sure this is really a free market equilibrium. There are two effects which explain the prevalence of ads even if consumers are willing to pay more for ad-free products:
- Imperfect information, aka Market for Lemons: It can be hard to find out how prevalent ads will be when buying a product. Consumers often make a purchasing decision without knowledge about ads.
- Changing terms after lock-in, aka Enshittification: Manufacturers (like Hisense here) can add advertising to products after consumers have already bought them. Initially, consumers have negotiation power since they can freely choose a product, but later they are locked in and cannot easily react to the manufacturer changing the product to their detriment.
alt Hacker News
I'm not so sure this is really a free market equilibrium. There are two effects which explain the prevalence of ads even if consumers are willing to pay more for ad-free products:
- Imperfect information, aka Market for Lemons: It can be hard to find out how prevalent ads will be when buying a product. Consumers often make a purchasing decision without knowledge about ads.
- Changing terms after lock-in, aka Enshittification: Manufacturers (like Hisense here) can add advertising to products after consumers have already bought them. Initially, consumers have negotiation power since they can freely choose a product, but later they are locked in and cannot easily react to the manufacturer changing the product to their detriment.