Meta’s Considering a Latest Subscription Offering Which Would Enable EU Users to Eliminate In-Stream Ads

Mark Zuckerberg has long maintained that Facebook will all the time remain a free service, but as E.U. regulations evolve, potentially further restricting the corporate’s capability to collect user data for ad targeting, perhaps now’s the time for Meta to re-evaluate that foundational concept.

In line with a brand new report from The Latest York Times, that’s indeed now in play, with Meta reportedly weighing the potential of offering paid versions of each Facebook and Instagram, which might enable E.U. users to avoid ads, and private data usage, entirely in each apps.

As per NYT:

“Those that pay for Facebook and Instagram subscriptions wouldn’t see ads within the apps, said the people, who spoke on the condition of anonymity since the plans are confidential. That will help Meta fend off privacy concerns and other scrutiny from E.U. regulators by giving users an alternative choice to the corporate’s ad-based services, which depend on analyzing people’s data, the people said.”

That pertains to the E.U.’s evolving Digital Services Act (D.S.A.), which comes into effect soon, and goals to offer more explicit controls for users as to how their personal data is used. Inside that, users will find a way to opt-out of personalized feeds, that are based on their in-app activity, and algorithmic interpretation of their preferences. There may also be more direct controls over what varieties of information users submit for use for ad targeting, and if enough people decide to withhold their data, that might have a major impact on Meta’s ad business within the region.

It also builds on Apple’s iOS 14 app tracking update, which enables users to opt out of sharing their personal data with any app that they use. That’s already cost Meta billions in lost ad revenue, and with one other blow to its data coming in, perhaps now’s the time for the corporate to look to other revenue options.

To be clear, under the reported proposal, Facebook and Instagram would remain free, but users would find a way to pay for a subscription to remove ads, in the event that they so selected.

The fee of such an option would likely have to be priced not less than $US6 monthly, based on Meta’s most up-to-date earnings report, which shows that Facebook generates $US17.88 per quarter from each E.U. user.

Meta could vary that to $8 monthly to account for fluctuations, though there would also have to be considerations as to the impact of subsequent reductions in overall ad exposure, and the way you mathematically align that with these figures. Which could see the worth go even higher to account for potential losses. But as a baseline, that is around the fee that Meta could potentially lose by offering an ad-free version.

And provided that Meta’s already selling verification on Facebook and Instagram for $US11.99 monthly, which has apparently been reasonably well received, perhaps it’s now more open to the concept of charging for subscriptions, which is an option that it has all the time kept open, although, as noted, Zuckerberg has maintained that the app will eternally be free, not less than in some version.

Back in 2018, amid investigations across the Cambridge Analytica scandal, Zuckerberg appeared before the U.S. Senate, and was asked directly whether Facebook might consider charging for access to avoid concerns around personal data collection.

Zuckerberg’s response:

“There’ll all the time be a version of Facebook that’s free.”

A “version”, which seems to suggest that the corporate was keeping the door open for one other version of the app as well.

Then Meta COO Sheryl Sandberg further explained that:

“Now we have different types of opt-out. We don’t have an opt-out at the best level. That might be a paid product.”

So the concept of a paid opt-out for ads has been there for years, but it surely’s not something that Meta seems to have actively considered. Till now, though Meta’s remaining tight-lipped on the concept.

It is sensible. Meta has already faced big fines for violating previous E.U. data regulations, underlining E.U. regulators’ inflexibility in enforcing such, and as noted, its ad business has also suffered some significant blows consequently of previous updates to data collection processes.

Possibly, now’s the time, and Meta will actually consider offering an ad-free version, further expanding its paid subscription offerings.

Which might make Elon Musk very blissful, considering his stance that every one social platforms will eventually must move to paid offerings.

It still looks like most individuals will opt to persist with the ad-free versions, while platforms might want to offer free access to maximise traction in developing markets.

But perhaps, the tide is shifting, and more paid options will soon change into the best way, in additional apps.