Let's assume you have an average of million active users per month which spend an average of min in the app per month.
You decide to start advertising with videos in the background. Unfortunately this scares off some users and you lose % of your users.
Luckily, on the other hand, % of the initial user base convert to a premium version of your app that doesn't come with advertisement but which costs $ per year.
% of the time non-premium users will see video ads with an average length of seconds. Given a CPM of $ we can now calculate the revenue.