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Welcome to the era of social media paywalls. We thought the old business model of selling our data to Russian agents and extremist groups was solid, but maybe it’s not panning out anymore.
The Wall Street Journal reported Tuesday that Meta plans to roll out a paid-for subscription version of Instagram and Facebook in Europe without the invasive, incongruous, sometimes downright disturbing targeted ads that have made the company into the behemoth it is today. Meta’s motivation doesn’t appear to be specifically business-related, but rather a way to get European Union regulators off its case.
Privacy? It’ll Cost Ya
The EU is in the middle of a big regulatory push to bring Big Tech companies to heel, and although there has been some debate about what exactly defines Big Tech, Meta would be hard-pressed to escape the classification. In Meta’s case specifically, the EU has been trying to narrow the company’s ability to show targeted ads to users, insisting that it allow users to opt out of that particular feature — except is it really a feature when it’s a company’s core business model?
“It seems like a negotiating tactic, more than a reliable business plan,” Dr. Bernie Hogan, a social data scientist at the Oxford Internet Institute, told The Daily Upside. Hogan added that the reported pricing structure leads him to suspect Meta doesn’t view it as a real business tactic:
- Per the WSJ and the FT, Meta is planning to charge $14 per month for a subscription to ad-free Instagram and Facebook on mobile, and $17 per month on desktop. One source told Reuters the price plan wasn’t settled yet, but €10 per month (about $10.46) was the most likely to win out.
- “That this is a rather expensive first offering, not dissimilar to how I think X tried to make the blue checkmark $20, and then sort of negotiated down with the crowd towards $8 a month,” said Hogan.
“Relative to Netflix, where you can have a Netflix account per household and everyone can enjoy it, the notion here is that this would be a Facebook per account. And so if you have a family of three or more people, this could be an absolutely huge expense,” he added. Even by Meta’s own standards, it’s a high monthly price point. According to Meta’s Q2 earnings release, its average revenue per user (ARPU) in Europe was $17.88, so really they’re worth just under $6 per month.
Pixel Problems: It’s no guarantee that this move will convince regulators that Meta treasures user consent. The Facebook Pixel, a piece of code that websites insert to let them track users and target them with ads, follows you around the internet even if you don’t have an account on one of Meta’s services, and can expose highly sensitive information. Hogan said nothing about an ad-free subscription plan for Facebook and Instagram making the pixel less invasive. “It is part of an aggressive whack-a-mole of information security that is happening between regulators and Facebook,” he said. What a fun time for everyone involved.