<p>The growing monetization of user data through ad-based subscription models has raised privacy concerns, driving demand for premium, ad-free services. While these premium offerings provide better content quality, they come with higher costs, particularly in creator-driven economies. This study explores the trade-offs between ad-based and premium models, investigating when platforms should offer ad-free or premium services and how to design them to balance consumer privacy preferences with content creators’ cost sensitivities. We develop a game-theoretic model comprising a digital media platform that caters to heterogeneous viewers and creators in a two-sided market. The platform determines the optimal advertisement level for its free, ad-based services while setting pricing and creator incentives for its premium subscription offerings. We show that premium subscriptions do not always guarantee a higher profit for the platform. While premium subscriptions can generate higher profits than free ad-based services when advertisement revenue is low, under high advertisement revenue, these can hurt the platform when it cannot significantly reduce viewers’ privacy concerns. Moreover, the platform should offer both free and premium subscription options when it can moderately reduce viewers’ privacy concerns and is unable to deliver substantial intrinsic value to content creators. Thus, our work provides a profit-maximizing framework for digital media platforms addressing privacy issues within a creator economy.</p>