Meta and Twitter's move to milk users might backfire

To some industry experts, the recent move by Facebook parent company Meta to launch a subscription service is rational – these firms need to diversify their revenue streams. But others think the new pay-for-vanity strategy might backfire.

Meta’s chief executive Mark Zuckerberg announced last week it would launch a paid subscription service, Meta Verified, on Facebook and Instagram.

The new feature will allow users to “get a blue badge, get extra impersonation protection against accounts claiming to be you, and get direct access to customer support”. It will cost up to $14.99. The service has already been rolled out in Australia and New Zealand.

It’s not the first such move in the industry. Snap pioneered a subscription tier with Snap Plus ($3.99/month), and Elon Musk’s Twitter followed with Twitter Blue ($8-11/month), although the launch of the latter was postponed after several controversies.

What is going on? Over the years, billions of users around the world got used to the idea that social media was free – or that the services could be traded for data. And now this?

On the one hand, Big Tech companies have been bleeding profits lately and are trying to make up for it – they started with mass layoffs and are now looking for new ways to boost their lagging revenue streams.

However, other experts Cybernews talked to say the features on Meta’s offer – a blue badge, protection against impersonators, and quick customer support – should simply be available free of charge.

A high degree of privacy of protection is what all social media users should expect from rich, powerful social media giants. Analysts say the risk is immense because a bunch of users might just walk away.

More consistent source of revenue

Meta might not be in deep trouble, but the industry environment is still tense. Among general factors like Big Tech firms clipping their own wings after the COVID-19-inspired expansion spree, it didn’t help that Apple restricted Meta’s ability to track users’ internet activity, a key source of data for targeted ads.

The company admitted last year that the Apple change would cost it more than $10 billion in lost advertising income for 2022. Zuckerbeg announced later that Meta was letting around 11,000 people, or 13% of employees, go.

In other words, it probably was time to act, Mark Voronov, a social media expert and co-founder of SocialPlug, a social media service vendor, told Cybernews.

“The decision by these social media platforms to offer various subscription options is a timely move. The subscription model is a proven strategy that has been adopted by many successful tech companies, including Netflix and Amazon. By offering premium features to subscribers, these platforms can create an additional revenue stream and enhance their user experience,” Voronov said.

Daniel Thompson, co-founder of Salt Water Digital, a digital marketing agency based in Vancouver, points to the elephant in the room – Meta desperately needs to find additional revenue because its competitor Google is doing much better at online advertising.

“Unlike Meta, Google does not rely heavily on Apple for user data. Besides, Google agreed to be the default search engine for Apple's Safari browser. That means Google's search ads appear in more places, gathering more data that advertisers can use. That will be a major issue for Meta in the long run,” said Thompson.

Subscription models – in theory – provide a more consistent and sustainable source of revenue and can help Meta or Twitter reduce reliance on advertising.

Add some perks that most businesses or users don’t have access to, and the attraction of the new tier can be obvious, Silvia Marin, another social media specialist who’s at BBG&G Integrated Marketing, told Cybernews.

Penalizing users?

The problem, according to Marin and many others, is that business perspective is usually not quite the same as user perspective. And there are certainly reasons for Facebook, Instagram, or Twitter users to be annoyed, if not angry.

“Offering protection and privacy as an added perk is a bit of a concern because these are perks that people should already have after signing up for a platform. People should be confident that their privacy and protection are not jeopardized,” said Marin.

Most users are justifiably worried about privacy, protection, and security but this doesn’t mean they’re willing to pay for such features, as they view these as basic necessities that should be provided free of charge.

“It will be important for Meta to clearly communicate the added value of these features, the benefits they bring to users, what makes this subscription model different to the standard levels of privacy, safety and security normal users will have, and whether they will be at a disadvantage,” said Alex Robinson, founder of Novus Digital, a SEO agency.

Others are more blunt. “It's almost like these platforms are penalizing users who cannot or will not subscribe, and this is not a good look for them. I believe that Twitter and Meta may be shooting themselves in the foot with this move,” Milosz Krasinski, a SEO consultant, told Cybernews.

In a sort of a blackmail attack on what some would call fundamental pillars of any online platform, Twitter has already announced it was disabling SMS-based two-factor authentication unless users pay up for a Blue subscription.

Moreover, the potential extra revenue would probably not be that huge. Twitter Blue is a good example – despite the fact that the platform has dozens of millions of daily users, as of this month only around 300,000, or less than 0.2% of monthly active users, have subscribed to the new paid verification service, and a big chunk of them are Russian propagandists.

Twitter Blue. Image by Shutterstock.

“The revenue seems to be insignificant on a balance sheet like Meta's. As a result, I've observed many creators beginning to migrate their own audiences to sources they own such as newsletters and podcasts in an attempt to become less reliant on these platforms,” Dan Gray, the chief executive of Vendry, a business discovery platform, told Cybernews.

“Meta, Twitter, and other social media would be wise to invest development resources into

making it easier for creators to partially own their own first party audiences and monetize them, versus the platforms trying to monetize their core users.”

A new caste system

Finally, the danger is that platforms such as Facebook, Instagram, or Twitter will create a divide between paying and non-paying users. The latter can be easily alienated: the all-important daily engagement would decline, or people might simply move elsewhere.

People at Meta told Financial Times that Meta Verified users would also get access to more features “to increase visibility and reach”, such as prominence in search and recommendations.

"Will marginalized communities – less likely to be able to afford the new feature – be cast aside from having their voices heard?”

Poul Constinsky, Aligned Social.

However, the feeling that you cannot really control what you see on your Facebook timeline is already prevalent and frustrating – will Average Joes actually want to look at even more influencers who buy their way into their feed?

Poul Costinsky, chief product officer at Aligned Social, a new social media platform, told Cybernews he thought there’s already a clear stigma associated with “paying for vanity”.

“Facebook’s biggest problem is losing users – and advertisement dollars – to TikTok and streaming services. Asking people to pay for being first class is not going to help. Will marginalized communities – less likely to be able to afford the new feature – be cast aside from having their voices heard?” asked Costinsky.

The way for social media giants to avoid the impression that a new caste system has been created, according to Jessica Shee, marketing manager at tech company iBoysoft, is to sell genuinely new experience-enhancing features – not essential ones people already perceive as basic.

“They could be offering a different value and drawing in subscribers with things like exclusive content, or discounts on products or services. Perhaps they could even offer special privileges like early access to new features or access to an exclusive group of influencers,” said Shee.

“The bottom line is, if the platforms want to monetize their services, they need to offer something that people can't get anywhere else. People are willing to pay for a premium service, but they want to get something out of it.”

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