Rolling Out the "Red Carpet" Treatment
It was only a matter of time before Meta followed in Twitter's footsteps and rolled out their own subscription service. Essentially, this means that your 52-year-old uncle will now have to pay to voice his outdated and cringeworthy socio-political opinions.
In all seriousness, the new service will be called "Meta Verified" and will cost users $12 for web or $15 for iOS. Per Meta's official statement, the service will provide extra protection from impersonation of accounts and direct access to customer support.
Uhhhhhh, am I crazy, or does that sound like something a company that is purporting to be a social media platform for billions of people should already be offering…you know, for free? It's me, you say? I'm crazy? Got it.
Additionally, Zuck says that the service will "increase authenticity" and "help creators build communities" across the platform. Yes, social media is the first place I run to when I'm looking for authenticity and genuine community. Sign me up!
Now that we've gotten the sarcasm out of the way, the more interesting question is how we got here. Twitter made headlines when Musk announced its "Twitter Blue" subscription model, and now Meta is taking the bait. At this point, social media apps would be remiss NOT to have some kind of subscription model.
From the beginning, social media's appeal was that it was free for users. If that's the case, then how did companies monetize users, you might ask. Advertising was the name of the game and, in fact, the only game. In 2022, a whopping 97.5% of Meta's $116bn in revenue came from advertising, and when the gravy train was running, things were fine.
Gone are the days when there were a few large companies dominating and eating up all of the advertising revenue. With the democratization of technology, there are now hundreds of apps all fighting for our eyeballs and attention. As a result, advertisers have diversified how they allocate their advertising budgets, which is forcing companies like Twitter and Meta to diversify their revenue streams. Enter the subscription model.
The one point of leverage that these companies have is a massive user base. Facebook and Instagram's combined 5.7 billion userbase means that these apps are essential for content creators to promote on. They are taking a bet that increased visibility and prioritization on things like search and comments could help content creators build a loyal fan base and monetize their target audiences more effectively.
The big question: Will this be both a win for Meta, helping them build a new and consistent revenue stream, and a win for content creators by helping them reach new audiences? Or will it crash and burn? Grab the proverbial popcorn and find out over time with me.