You're right that it would require a new business model, but I don't think there's a business model that allows "Free" and "Paid" users in a way that doesn't inevitably create an equality problem. If Free is just as good as Paid, no one would pay. If people wouldn't pay and it needs to be free, you'll need to monetize it and that's likely advertising.
Open source, community driven apps might be a good solution. But open source tends to be driven by tech people solving a tech need. Just having open code also doesn't solve a lot of issues, like an open source video platform still needs to pay for the data.