Kernic

Just my toughts.

Facebook and Instagram Plan to Offer a Subscription

Facebook and Instagram want to offer subscription models. What does this mean for users? Thoughts on the monetization of social media.

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For me, Facebook is dead. I still have an account, but I haven’t logged into it in years. Instagram, on the other hand, I use regularly. I mainly watch the videos my girlfriend sends me. But it keeps me entertained. I rarely actively swipe through my timeline or Reels, which means I hardly see any ads.

But for active users of both apps, it’s surely a different story. Especially since the visible ads are only one side of the coin; the other is the collection of user data. To comply with GDPR, a service in Europe must also be usable without consent to data collection. So far, this option doesn’t exist. Meta, the parent company behind Facebook and Instagram, will now offer this option as a paid subscription. Depending on the platform you subscribe on, the subscription is expected to cost between 10 and 13 euros per month.

With this, Meta is offering a data-minimal way to use its services. The EU regulation did not stipulate that this had to be a free option. Admittedly, the services cost money, and that has to be earned back, preferably with a profit. But I don’t exactly find ten euros a bargain for a platform that doesn’t create the content itself. Meta simply provides enhanced hosting with social features.

On the other hand, in the 2021 fiscal year, Meta generated $15.35 in revenue per user from the EU per quarter. That’s only about $5.10 per month, but the network effects from user data are probably important here - which would be lost with a subscription and could thus also reduce the revenue from connected accounts. Facebook has probably calculated a figure here and generously rounded it up. And they pass the fees from mobile platforms directly on to the users. So you can see that Meta still prefers its ad-based users.

I will not be getting a subscription. I don’t use Facebook, and on Instagram, I hardly see any ads due to my usage habits. My data is also likely quite uninteresting, as I really only interact with a single person via private message. Otherwise, I just consume Reels that are sent to me.