What are the Meta’s Subscription Offerings?
Mark Zuckerberg has long maintained that Facebook will always remain a free service. But, in light of evolving E.U. regulations that further restrict the company’s capacity to gather user data for ad targeting.
It may be time for Meta to re-evaluate their foundational concept.
The New York Times reports that it is indeed in play, with Meta reportedly weighing the potential of offering paid versions of Facebook and Instagram.
It will enable E.U. users to avoid ads and personal data usage entirely in both apps. NYT further states that those paying for Facebook and Instagram subscriptions will not see ads in the apps.
This statement comes from the people working for Meta, who spoke anonymously because all these plans are kept confidential.
How Meta’s new subscription offerings are going to help?
It may help Meta fend off privacy concerns and other scrutiny from E.U. regulators by giving users an alternative to the company’s ad-based services. It relies on analyzing data of the users, the people from the company said.
It relates to the E.U.’s evolving Digital Services Act (D.S.A.), which will come into effect soon. It will aim to provide more explicit controls for users regarding how their data is used.
Within these new subscriptions, users can opt out of personalized feeds based on their in-app activity and algorithmic interpretation of their preferences.
There will also be more direct controls over what types of information users submit to get used for ad targeting. If enough people choose to withhold their data, it could significantly impact Meta’s ad business in the region.
It also builds on Apple’s iOS 14 app tracking update. It enables users to opt out of sharing their data with any app that they are using currently.
How much will Meta lose because of these new rules and subscriptions?
It is already costing Meta billions in lost ad revenue, and with another blow to its data coming in, it may be time for the company to look to other revenue options.
To be clear, under the reported proposal, Facebook and Instagram will remain free, but users could pay for a subscription to remove ads if they choose otherwise.
What is the cost of this new subscription?
Such an option would likely be priced at least $US6 per month. Meta’s most recent earnings report shows that Facebook generates $US17.88 per quarter from every E.U. user.
Meta could vary that to $8 per month to account for fluctuations. However, there would also need to be considerations as to the impact of subsequent reductions in overall ad exposure, and how you mathematically align that with these figures.
It could see the price go even higher to account for potential losses. But as a baseline, this is around the cost that Meta could potentially lose by offering an ad-free version.
Because Meta is already selling verification on Facebook and Instagram for $US11.99 per month, it has apparently been well received.
Will the Facebook app stay free or succumb to the concept of charging subscriptions?
It may now be more open to the concept of charging for subscriptions. It is an option that it has always kept open even though Zuckerberg has maintained that the app will stay free forever, at least in some versions.
In 2018, amid investigations around the Cambridge Analytica scandal, Zuckerberg appeared before the U.S. Senate and questioned whether Facebook would consider charging for access to avoid concerns around personal data collection.
What was Zuckerberg’s response?
Zuckerberg responded that there will always be a version of Facebook that will remain free forever.
It is a “version”. It seems to suggest that the company was also keeping the door open for another version of the app.
What Meta C.O.O. Sheryl Sandberg further said or explained?
Meta C.O.O. Sheryl Sandberg further explained that they have different forms of opt-out. Sandberg also added that they don’t have an opt-out at the highest level. It would be a paid product.
So, the concept of a paid opt-out for ads has been there for years, but it is not something that Meta has actively pursued or considered. Till now, Meta was tight-lipped on the concept.
It makes sense. Meta has already faced hefty fines for violating previous E.U. data regulations. It underlines E.U. regulators’ inflexibility in enforcing its rules.
As noted, its ad business has also suffered some significant blows due to previous updates to data collection processes.
It is time now, and Meta will consider offering an ad-free version. It will further expand its paid subscription offerings based on situations.
It will make Elon Musk very happy because of his stance that all social platforms will eventually need to move to paid offerings.
Will users go for ad-free versions of the app by paying for subscriptions?
Most people will stick with the ad-free versions, while platforms must offer free access to maximize traction in developing markets.
But the tide is shifting, and more paid options will soon become the way in more apps.
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