That used to be called subsidy. It probably still is, for all I know.

I think subsidy is a useful word in this context because most Americans (but sadly few Europeans!) have been brought up to believe that subsidy is intrinsically “bad” and therefore it may prompt them to think more critically about all of this.

For example, if someone starts a “business” in the expectation of receiving a subsidy, is it really appropriate to call him an “entrepreneur”?

Subsidised businesses have never operated in the customer’s interest. (That’s why they have to be subsidised, right?) Whether it’s anything in the old USSR, or the UK car industry in the 1960’s and 1970’s, or Airbus and Boeing, or French farmers, they’re really have nneither incentive nor need to knock themselves out for customers. (One can make a special case for “patronage”, as in Mozart or the BBC, but I can’t figure out how that would work in the Web 2.0 world.)

Subsidy-by-advertising is not really very different to subsidy-by-tax. Some people may be able to tolerate the nuisance of ubiquitous adverts, but who, once the penny drops, is prepared to accept the higher prices in the shops for those advertised goods that are required to pay for BOTH the free goods AND all the marketing middlemen needed to administer the subsidy? Cheaper, surely, to pay just for what you get and let the middlemen starve?