Meta, the parent company of Facebook, is weighing the idea of an ad-free Facebook experience at a tentative price of $14 a month, following the nuances introduced by the EU’s recent data privacy regulations. As The Wall Street Journal detailed, the tech giant submitted a proposal to EU officials recently, hinting at this new subscription model.
EU’s new Digital Services Act (D.S.A.) has compelled Meta to rethink its strategy. The act could limit the company’s ability to serve personalized ads, a major revenue stream. The concern for Meta is delivering a sub-par experience to its users by displaying untargeted ads. This can adversely affect overall platform engagement. Introducing an ad-free subscription might be an answer to maintaining user experience quality while ensuring consistent revenue.
The tentative price point, according to the report, is $14 for an ad-free Facebook, and for an additional $3, users could have Instagram included. While this pricing might appear steep, a seamless, ad-free experience might be enticing for a segment of users. It’s crucial for Meta to balance between the new revenue model and its current ad-based earnings. Each EU user contributes around $US17.88 to Meta’s coffers every quarter, solely through Facebook ad exposure.
The move underscores a pivotal shift in how tech giants are approaching monetization, especially considering stringent data privacy laws. For marketers, this could mean a potential reduction in the audience reachable through ads, but also an opportunity to target a more premium segment of users who opt for paid ad-free experiences.