- Meta and Twitter are officially in the subscription business.
- Social media companies are betting on subscription models as their ad revenue dwindles.
- By doing so, they risk allowing their platforms to become relevant to a select few users willing to pay.
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Desperate times call for desperate measures. This motto perhaps explains why Meta decided to go ahead with its latest idea: make its users pay for subscription services.
On Sunday, Mark Zuckerberg, still upset about his failed launch of the metaverse, introduced Meta Verified, a new subscription service for $12 on the web and $15 on iOS and Android devices. This offers Facebook and Instagram users access to account verification, added security, and perhaps most importantly, increases your visibility and reach on the platforms.
Meta says that there will be no changes to already verified accounts. She also says that the service is primarily aimed at content creators looking to grow their following. An initial release in Australia and New Zealand is expected to be followed by a global release. Elon Musk’s Twitter is doing something very similar. (Elon Musk said Sunday night that it was “inevitable” that Meta would go the way of Twitter and charge for having verified accounts.)
Sure, users don’t have to part with their money; however, choosing not to do so could mean that they suffer a degree of self-sabotage. It looks like Facebook and Instagram will increasingly amplify the voices of a select number of users who are willing to part with their money, giving a very different look to services that have become digital urban plazas.
Silicon Valley’s new pay-to-play services, then, risk making social media’s great benefits of free speech, global reach and visibility reserved for the few; and it’s all because Zuckerberg and Musk need to improve their results.
Digital ad dollars on the decline
Facebook and Twitter are dealing with a collapse in their ad revenue (over 90% of companies’ revenue streams). This is because advertisers are drastically reducing their spending for fear of an economic downturn.
In Meta’s case, changes Apple made to its privacy policy in April 2021 have been cited as another key reason its ad business has struggled. The company said in February of last year that the changes would cost it more than $10 billion in advertising revenue by 2022.
Meanwhile, Twitter suffered a 40% drop in revenue year-over-year, according to a Platformer report in January. This is because several advertisers stopped spending on Twitter during the first months of chaos after Musk bought the company.
So the timing of the launches of Meta and Twitter’s subscription services does not seem to be a coincidence: they are introducing paid services at a time when digital ad revenue is being taken away from them.
Meta says its new subscription service is primarily for content creators; however, this seems false because everyone on their service is, in effect, “content creators.” Posting and following content on Facebook and Instagram helps encourage interactions; this, in turn, improves the efficiency of targeted ads and thus generates revenue.
Money for nothing?
A verification feature is important to companies like Meta and Twitter, which have had a checkered history of handling misinformation and fake accounts. Ensuring that people are who they say they are is important.
By introducing a subscription model to combat problems that have long plagued the platforms, Zuckerberg and Musk risk alienating legitimate users who can’t pay, and in the midst of an inflation crisis.
Rob Leathern, a former senior director of product management at Facebook, argued in a LinkedIn post that “there are so many good reasons to launch something like this as paid,” because identity verification costs money and isn’t “100% accurate.”
It could be true. The legacy verification system suffers its own share of problems. For example, users seeking verification are often turned away by a system that lacks consistency and makes arbitrary decisions about who should and who should not be verified.
Even former Twitter CEO Jack Dorsey acknowledged that the verification system broke in 2017. Back then, it became clear that verification was “interpreted as endorsement or an indicator of importance” rather than authenticating “identity and voice.” ».
But the cost of solving the verification problem should be borne by the platforms themselves, given the basic functionality they need to provide to users. Charging for it illustrates a clear misunderstanding Zuckerberg has about Facebook and its users: the platform is responsible for investigating who has access to its platform; not the users themselves.
Just 0.2% of Twitter users in the US had signed up for Twitter Blue, Musk’s subscription service, as of the end of January. It’s a sign that users see little value in what they’re being asked to pay for.
Meta can say that it is serving its users with the launch of its subscription; however, you shouldn’t be surprised if it gets the same lukewarm response as Twitter Blue. In fact, Meta only seems to be serving its own financial needs.
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