Paying for YouTube Makes Sense. But Facebook?
Meta Platforms Inc. has become the latest social media giant to tinker with the idea of selling premium features as part of its service, according to a report in The Verge. Having been free for years, it wants to see if any of us will pay for new widgets in Facebook, Instagram or WhatsApp.
That's going to be a hard sell.
Ask yourself this question: What special feature on Facebook would you pay to use? Consider that over the past decade, the company has experimented with an array of new services that failed to win over its users, from a whizzy digital assistant in Messenger to a big cryptocurrency project. All flamed out and were free.
From Facebook's vantage point, it would be nice if there was a simple fix like charging people to remove ads from their newsfeeds. That would cost very little, and it clearly worked for YouTube Inc., which has lured subscribers by making its ads so exasperating that users will happily pay to be rid of them. But Facebook users just scroll on by.
In the last seven years, YouTube's paying subscribers have steadily grown. Today more than 50 million pay between $10 and $11.99 a month for either YouTube Premium or YouTube Music.
YouTube doesn't break out its revenue for these subscription services, but a conservative estimate would suggest it's getting $500 million a month, or $6 billion a year in subscription fees, representing close to a fifth of the division's total sales. (The rest comes from advertising.)
That would make YouTube an outlier in social media. Meta, Snap Inc. and Twitter Inc. have all made efforts to diversify, but few have managed to reduce an entrenched reliance on advertising.
Snap, which gets 99% of its revenue from ads, floundered in its attempts to sell smart glasses. In June,
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