The point of the fediverse is that hosts can pick their own business model - free, freemium, ad-supported, subscription. Just like e-mail, you sign up with the provider who provides the type of service you think best meets your needs. If they piss you off, you move to a different provider.

If the fediverse demands hosting for millions of users, someone will make a server to host millions.

I personally think "big" instances should focus on user/identity management, while communities live in small groups on small instances. This lets the identity providers include/exclude with much better granularity (compared to the beehaw mess) making the communities much less susceptible to being collateral damage.

Would ads be of much value on a lemmy instance? Almost nobody using lemmy would not be using an ad blocker. And if an instance integrated ads, other instances would have access to their communities without ads unless you do some kind of "native content" scheme where some of your posts are ads which I don't think anyone would tolerate.

I could see maybe sponsorships with locally hosted shout-outs in the sidebar working for some people.

I think I'd rather have an optional membership to support the instance with perks or something. Not reddit gold though. Lemmy silver?

AO3 is a huge website that makes money purely off of donations. They often get like quadruple the amount they ask for every time they ask for money. Wikipedia comes to mind as well, although I'm not sure if they only make money off of the donations. Instead of donating to a third party service, Lemmy should build in the ability to donate into the website.

Instead of ads Lemmy operators should be paid for hosting. Users should be asked for funding on a periodic basis (perhaps a small number of subscribers could fund the entire hosting for all.)

No one should assume this is all free forever.

Maybe something like DuckDuckGo's ads that respect DNT?

I think it's reasonable for some instances, where there's good alignment. There was a thread I replied in a few days back around how/if TTRPG creators(who are mostly small enthusiasts themselves) could advertise in related magazines, and legitimizing that business wouldn't really pose a conflict for the hobby - that's how it was built in the first place! It's just a matter of finding a place for it and defining the technical solutions.

As a general "let in all the advertisers and promise riches for someone" measure, it does cause known problems. There is some freedom to figure out what works in a specific case here, it's not defined top-down since it isn't centralized.

I'd be absoloutely fine with some unobtrusive side bar adds, its only when adds make it difficult to actually use the website that add block turns on.

I'd like this to be avoided as much as possible. But I am a bit weary about the fact that even small instances have to copy everything else on the Fediverse and thus will be very strained. Or do they copy the stuff only when their user wants to view it? Not sure how it works.

I’d probably be fine with Old-Style Internet Ads: A Div that displays a bit of text or a small image that suggests an interesting product for the user, possibly related to the page content they’re viewing.

But new style internet ads demand things like iframes, numerous scripts, user tracking, user anti-tracking circumvention, and attempts to weasel their way out of the small sidebar they’ve been scripted into. If there was any way for an advertising network to ban/blacklist any advertisers that do things like that, or even offer them a limited model for what they can add to a page, I’d be a little more okay with them.

I'd rather have a smaller/cheaper platform with no ads than a bloated mess like reddit with ads and data mining.

A small community is perfectly ok.

Ads is what's ruining everything that's good on the internet. If you have two similar platforms and one is run by ads and one by a subscribtion model the latter is going to give you way better experience.