Technology

in 2022, advertising revenue amounted to close to 113 billion U.S. dollars whereas payments and other fees revenues amounted to around two billion U.S. dollars.

With roughly three billion monthly active users as of the second quarter of 2023, Facebook is the most used online social network worldwide.

113/3 = about $38 per user per year

14*12 = $168 per user per year

Which would be a mark-up (a Zuck-up?) of 342%.

You do have to figure though, that it’s only the most active users who will opt to pay $14/month, and it’s those same highly-active users that contribute the most to the ad revenue.

Having no idea how those stats actually break down, we could take a wild guess and do a Pareto Principle 80/20.

Say the top 20% active users constitute 80% of the ad revenue, and those same top 20% all switch to the paid model:

(113*0.8)/(3*0.2) = about $151 per VIP user per year

…which is a lot closer to the $168. Zuck-up of about 11%.

80/20 is probably cutting them too much slack, but the real markup is probably closer to 11% than it is to 342%.

This is also not factoring the extra operational expense of supporting the new model.

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Math part over, here’s my take:

This is good.

Ad-based models are toxic. We poisoned our culture, bulldozed our privacy, distorted the economy, gave unfathomable power to immature narcissistic opportunists, and underdeveloped public FOSS tech because we expected privately-owned services to be Free™ even though they could never be literally free.

This is a move towards unmasking these services and revealing the real economic gears whizzing around behind them.

The more people understand what their privacy and autonomy is worth to these companies, the more they might insist on keeping it — and maybe even seek out places where they don’t have to pay for the privilege.

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Sources:

https://www.statista.com/statistics/268604/annual-revenue-of-facebook

https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

And they won't collect information about the subscribers, right?

That's a classic create a problem, sell the solution situation.

A couple of key highlights:

The proposal is a gambit by Meta to navigate European Union rules that threaten to restrict its ability to show users personalized ads without first seeking user consent—jeopardizing its main source of revenue.

It would give users the choice between continuing to access Instagram and Facebook free with personalized ads, or paying for versions of the services without any ads, people familiar with the proposal said.

Under the plan, Meta has told regulators it would charge users roughly €10 a month, equivalent to about $10.50, on desktop on a Facebook or Instagram account, and roughly €6 for each additional linked account, the people said. On mobile devices the price would jump to roughly €13 a month because Meta would factor in commissions charged by Apple’s and Google’s app stores on in-app payments.

Privacy-conscious users in the U.S. shouldn’t expect to be offered the option to pay for ad-free Instagram or Facebook soon. Meta’s proposals have been pitched specifically as a way to navigate demands by EU regulators to seek consent before crunching user data to select highly personalized ads.

It isn’t clear if regulators in Ireland or Brussels will deem the new plan compliant with EU laws, or whether they will insist Meta offer cheaper or even free versions with ads that aren’t personalized based on a user’s digital activity.

This feels like Meta is just attempting to play at Malicious Compliance. There's no way they make that much off each user per month, this feels like they are intentionally making it cost-prohibitive to have the ad-free version just so they can say they are meeting EU regulations. I certainly cannot see many users shelling out ~€17 a month for Instagram and Facebook.

As noted, though, this may not be enough to pass the EU regulations.

$14 a month is an incredibly large amount, maybe if it also allowed you to disable reels and go to a chronological feed it would be nice for some but still. Says a lot about the value per customer I guess.

@alyaza guess I'm staying on Fedi, lol. I get all this for the price I donate to my server (or other servers like beehaw). Besides, there's less distractive stuff and the interface is less addicting.

This is probably the migration event that Pixelfed has been waiting for. Anybody know how this news is being received on Instagram?

14 bucks.. to make content for them and them also have to watch ads... why?

Ad free, but ist it also tracking free?

I'm not willing to pay 13 bucks a months for ad-feee YouTube. In what world does Meta expect me to pay more then that for having an ad-free experience on their dogshit platforms?

Gosh, if they’d offered this 10 years ago, I’d have been MUCH more interested. As-is, I haven’t really used Facebook in a year or two because of the awful timeline, not the ads. So cool idea, but too little (well, too much cost, I guess) and too late for me to care.

Who is still using facebook?

When I used Facebook I wouldn't of actually minded this if they also added some customization for your feed. However $14 is a big ask. Maybe for ALL their services including the Oculus.