I think you are correct, the root problem is that the targeted advertisement model is far more profitable than any paid model, thus outcompeting every sustainable alternative.
I personally think the solution is simple, yet fairly draconian and therefore hard to implement due to the inevitable political backlash: ban all targeted advertising. You can still run ads on digital platforms, but the outcome of the heuristic used to pick an ad must be independent of user derived data, including session data, ip address, time of day, country, past viewing history and so on.
This is completely wild to me. I honestly do most of my clothes shopping through Instagram/Facebook ads. I enjoy that targeted advertising shows me new products and companies that I'm interested in, often very niche stuff that I don't come across otherwise. I would so much rather see that than ads for life insurance, penis pills, ambulance chasers, or whatever other bullcrap goes to the lowest common denominator. The ads that get read on podcasts are a great example of this.
If I'm going to pay for something by watching ads, I much rather watch fewer, higher value, more targeted ads. Untargeted ads are less valuable (to me, the advertiser, and the ad publisher), so I would have to see a lot more of them to pay for the content I consume.
I'm really not big on advertising. I dislike ads as much as anyone, especially when they're obnoxious and intrusive.
But I feel like a lot of people, on here especially, have this "all advertising is the devil period lalalala" attitude, but it does have real value. People don't like that it's been taken to a psychologically manipulative science of big brands being shoved down your throat. But I have genuinely found the ad experience on FB/IG to be the best there ever was. I do legitimately find out about things that I end up buying and liking and people ask where I got it and laugh when I say "a Facebook ad."
I personally think the solution is simple, yet fairly draconian and therefore hard to implement due to the inevitable political backlash: ban all targeted advertising. You can still run ads on digital platforms, but the outcome of the heuristic used to pick an ad must be independent of user derived data, including session data, ip address, time of day, country, past viewing history and so on.