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.
—
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.
—
Sources:
https://www.statista.com/statistics/268604/annual-revenue-of-facebook
https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/
This is not good. I don’t get how people still have good faith in big business. Here’s what’s going to happen, we will be moving towards a pay for service WITH ads. And data mining.
It’s not one or the other here. People somehow think it’s either a) “pay for the service” OR b) “have your personal data raped and parcelled out to the highest bidder.” It’s not. It’s not either a or b, it’s either b or a AND b.
So I have to pay to be tracked?
And you know once everyone acclimates to the new pricing, it’s going to be “hey we are adding a new plan for $9 that has ads and all the telemetry. Oh, we are also raising the rates.”
The real problem is the entire company is rotten. I don’t understand why people think a pay wall won’t make that the case.
Good to note that this isn’t even hypothetical, it literally happened with cable. First it was ad-funded, then you paid to get rid of ads, then you paid exorbitant prices to get fed ads, and the final evolution was being required to pay $100+ for bundles including channels you’d never use to get at the one you would. It’s already happening to streaming services too, which have started to bundle.
I don’t understand why more people just can see this? To me it’s connect the dots. Paint by numbers.
Big business is your enemy. I don’t know why folks still have faith in such a fucked up system that’s got a proven track record of being shit.
I don’t think the arguments made by you and OP are mutually exclusive. Facebook is a rotten company and we shouldn’t even be using their website, let alone paying them for the privilege. But Websites aren’t free to operate, Ads are toxic, and we shouldn’t let Ads be the method by which Websites pay their costs.
If OP weren’t posting their argument in a thread about Facebook, but Lemmy instead for example, I think your read might be different. Their last sentence, to me, indicates that they agree with you.
Yeah if you read more down the pipe, we aren’t in disagreement, fundamentally.
I just don’t think Meta is the entity to break free from the “why can’t everything on the internet be free when I just bought a $800 phone?!?” paradigm.
And I don’t trust them to just basically take what we have now, and sell it to us. Which, come on, you know that’s exactly what they’ll do.
TV powerhouses feared the internet would make their bloated cable packages obsolete. Look at them now. The internet has a bevy of streaming services. Cable packages 2.0.
Capitalism is getting worse, not better.
To be clear: When I say “This is good”, I don’t mean that this makes Facebook a good service. You’re 100% right about Facebook’s trajectory here.
My hope lies in improving consumer expectations, and tech entrepreneurs’ estimation of those expectations. For about 20 years, there’s been a universal assumption that users will never pay for a website, ever. They’ll pay with their privacy and attention all day long, but their wallet? Not gonna happen.
If this proves that there are users who will pay with their wallet instead of their soul, then it paves a way for people who are interested in making ethical services – people who may have been discouraged in the past because they were told that the only way to keep the lights on was to round up their users and feed them to a hungry pack of advertisers.
You’re working on the wrong end.
Customer expectations will improve once companies are brought in line and you know a) what you’re paying for and getting for your money and b) personal information is safe and your usage patterns are not being monetized or worse, sold to some shady third party. Letting the public simply acquiesce to the state of things rather than making things better is insanity. Tech companies have dictated the rules and it’s been basically a free for all to get your data. As much if it as possible. That’s why “free” services even exist. That’s the problem here. That all these dark patterns just became well, patterns.
Adding price tags to things doesn’t inherently make them better, I don’t at all see this warped capitalistic point of view.
With regards to Fb, it’s the same shitty service you use now. The same data mining and telemetry. The same shitty people take your money and make deals with other shitty people. But it now costs $12 so it’s good? You’re going to have to explain that to me like I’m 5.
Charging for things isn’t the right way go. Making things people would pay for is a much better route.
Look.
I made space for us both to be right here, cuz you pointed out a way for my original comment to be misinterpreted and I agreed with your thoughts on that misinterpretation.
But you clearly just want to fight now.
This is good.
I agree, in principal. I think the internet as a whole would be healthier if more sites weren’t so averse to offering paid ad-free/premium upgrades early on. Now people are used to getting everything for free, heavily subsidized by invasive advertising and until recently a bottomless pit of venture capital. It’s resulting in very nasty changes to these platforms as many try to find some pathway to sustainability that can be executed in 3-6 months.
When you get something free with advertising, you are the product. That is why enshittification takes hold so aggressively, because making you happy is not the primary means by which they bring in money to pay the bills.
However, at this point I have 0 faith in Facebook to actually do anything good, and I’m sure they will find some way to fuck this up entirely.
The math doesn’t need to make sense because the only reason they are doing this is to get around EU regulations. They are just providing a ad free experience option to make the EU happy.
You do have to figure though, that it’s only the most active users who will opt to pay $14/month
I’d say it’s more likely to be the most wealthy users who will pay the $14, and it seems plausible that the most devoted facebook users might care less about avoiding the ads than people who are there only reluctantly. So maybe slightly closer to the middle of that 11% to 342% range.
Thanks for breaking that down, I was trying to find the per user amount
m/TheyDidTheMath
Come on man, let that shit die with Reddit!
Good insight. We must protect @bug at all costs.
I need all the protection I can get now Big Subreddit are after me!
And they won’t collect information about the subscribers, right?
The information is worth way more than $14/month, last estimates I’ve seen put it around $50/month.
That’s a classic create a problem, sell the solution situation.
On useful ad-supported service I have happily paid a little to get rid of ads… on Facebook I’d have a very hard time saying it’s worth that much to me to have my data sold :p
Facebook (and Google) don’t sell user data. That’s a common misconception. The data is what makes the company valuable… They’re not going to go and sell it! Instead, they let advertisers target users based on the data (eg run an ad for people aged 24-30 that like computers). Advertisers never see the actual data, nor can they tell exactly who viewed their ad.
Did they just give all the data to Cambridge Analytica for free?
I include their advertising targeting in my data being sold, even if they retain the data in house, they are monetizing it heavily.
Did they just give all the data to Cambridge Analytica for free?
The Facebook Graph API is free, yes. Cambridge Analytica happened because the API was too open and allowed loading some profile data for not just you but your friends too. The idea was that social apps like Spotify could show your FB friends (and in fact Spotify was one of the early major users of the API), but of course some people figured out how to use it for evil.
The API is now very locked down as a result, and requires a lot of certification and approval to use anything even remotely sensitive. Developers don’t like that since you can’t easily write scripts/bots for FB any more like you can on Discord for example, but there’s not really any other option. Other apps like Discord will likely hit similar issues if they grow anywhere near the size of Facebook.
I include their advertising targeting in my data being sold, even if they retain the data in house,
Saying that data is sold implies that another entity is buying the data, which isn’t true. You could say that your data is being monetized, sure, but not sold.
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.
I agree re: malicious compliance. Also leading w/ the web price knowing that the majority of their base uses mobile devices to connect
this feels like they are intentionally making it cost-prohibitive
Like I mentioned in another comment - To me it seems like it’s priced relative to the market. YouTube’s premium membership is $15, but you can do a lot more on Facebook compared to YouTube (not just videos but also wall posts, messaging, photos, groups, events, dating, birthday reminders, etc) and their costs would be similar to Google in terms of data centers, servers, employees, etc.
$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.
The article says it’s $10.50/month? Seems like it’s priced relative to the market. YouTube’s premium membership is $15, but you can do a lot more on Facebook compared to YouTube (not just videos but also wall posts, messaging, photos, groups, events, dating, birthday reminders, etc) and their costs would be similar to Google in terms of data centers, servers, employees, etc.
You’d be surprised how much it costs to run a major web service that has a lot of content. Google search would cost at least that (if not more) per month if it was a paid service.
Why does the title say $14 then?
@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?
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.
Ad free, but ist it also tracking free?
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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.
