Pay-For-Play: Are Subscription Fees the Future of All Social Media Platforms?

social media subscription fees

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The current leading social media platforms – Instagram, Facebook, TikTok, and X – are beginning to develop and test paid models for their platforms to eliminate advertising.

Social media platform X, formerly known as Twitter, has already started testing this billing model with X users in New Zealand and the Philippines. A fee of $1 is charged for new users who want access to the platform.

According to Elon Musk, in a post on his social media profile, there will be two types of new plans for Premium users: one with a lower cost and all features but without ad reduction, and another more expensive one without ads.

Since the purchase of Twitter last year, Musk has been exploring ways to increase the company’s revenue directly or indirectly, either by charging user subscriptions or even generating revenue for content producers who pay for platform subscriptions.

These changes have caused dissatisfaction among older users of the formerly known Twitter, as, according to the company’s website, new users who choose not to subscribe to the Premium service will be subject to some restrictions, such as only reading posts, watching videos, and following accounts.

Meanwhile, TikTok…

According to the Android Authority website, TikTok is also jumping on the bandwagon by adopting a paid version to remove ads for Premium social network subscribers. The site suggests that the app’s code reveals tests to adopt a subscription system.

This service would have a value of $4.99 and its only function would be to remove platform advertisements, without adding any extra features, it seems. According to the blog, the subscription will only cover ads run by TikTok and not influencer marketing campaigns.

Source: Android Authority/2023

A poll by Android Authority shows that the idea of paying not to see ads on TikTok is still unpopular among its readers – with 59% of votes claiming that readers “feel fine” with the social network’s ads. 

A report by market research company Cowen found that TikTok is adopted even among more cautious ad buyers, with 60% naming TikTok as their preferred location for short videos. This reinforces the fact that the platform has largely relied on ads so far, gaining most of its revenue through them.

What remains to be seen is whether an ad-free subscription will significantly replace a portion of this revenue, following the footsteps of X and YouTube Premium, for example.

Focus on Monetization

And of course, Meta wouldn’t lag behind in this trend of social media monetization, right?

The company will offer people in the European Union and Switzerland the option to pay a monthly subscription to Facebook and Instagram without advertisements. This measure will not harm those who choose not to pay for the platforms’ monthly plans, allowing them to continue using these services for free while seeing relevant ads, just as it currently happens.

Meta states that to use social media without ads, people in these countries can subscribe for a fee that may cost €9.99/month on the web or €12.99/month on iOS and Android, and until March 1, 2024, the initial subscription will include all profiles linked to a user’s Account Center.

However, from March 1, 2024, an additional fee of €6 per month on the web and €8/month on iOS and Android will be applied for each additional account listed in the user’s Account Center.

According to the company’s blog:

“It also allows small businesses to reach potential customers, grow their business, and create new markets, driving growth in the European economy. And like other companies, we’ll continue to advocate for an ad-supported internet, even with our new subscription offering in the EU, EEA, and Switzerland.  But we respect the spirit and purpose of these evolving European regulations, and are committed to complying with them.”

Those who choose to continue using Meta’s products for free will continue to be supported by tools and settings and will not have their experience affected by these changes.

Advertisers will also be able to continue running personalized advertising campaigns in Europe to reach those who choose to continue receiving a free online service supported by ads.

And how does this affect the advertising market?

While tech magnates benefit from these new initiatives through new revenue sources, it is possible that the advertising market and social media marketing strategies may take a hit with Premium subscriptions on social networks.

The revenue acquired through ads on these platforms is significant, raising questions about whether the portion of revenue from subscriptions can significantly replace this source of funds.

What is clear is that the advertising market will have to invest more in influencer marketing actions, as this type of “advertising” will continue to be allowed on platforms for both subscribers and non-subscribers.

Ads will remain a crucial feature, as a significant portion of platform users may not acquire monthly subscription plans. However, to reach higher-income audiences, possibly those who will opt for a Premium subscription, it will be necessary to invest in influencers, whether they are nano or big influencers.

Thus, it will be necessary to think about more creative campaigns that reach all types of users and continue to generate engagement and return on investment for agencies and companies.

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