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Facebook Is Debating a Subscription Model

In the face of user revolt — or at least, some bad headlines — over its invasive ad practices, Facebook is reportedly weighing whether or not it could offer a subscription model for its services instead. Bloomberg reports that there is “more internal momentum” given the company’s recent privacy issues, which have laid bare Facebook’s standard practices, rather than illicit or nefarious ones.

In the past, the company’s research into the idea has suggested that users would balk at a free service turning paid, but the recent news has more people reconsidering just what the true cost of a free service is — i.e., all of your personal information.

This is all up in the air, and far from set in stone, but it’s worth speculating about. What, for instance, would users pay to continue to use Facebook? The average revenue per user on Facebook at the end of 2017 was a little over $6, meaning Facebook earns roughly $24 per user each year. The potential upside is that users who don’t need to have ad revenue extracted from their online activity might not be subject to Facebook’s monitoring practices.

But then you have to weigh different regions. Facebook makes almost all of its money from advertisers in the U.S. and Europe, subsidizing the service in developing nations. As former product manager Antonio García-Martínez told Select All last month, “The U.S. and Europe pay for Facebook and then the marginal cost of it is relatively small, so they give it away in Brazil or India, or whatever.”

That substantially raises the hypothetical cost of Facebook for users in more digitally developed nations. García-Martínez speculated, “It would put it on the order of a Netflix subscription, or more, potentially.” Is your privacy on Facebook worth a hundred bucks a year? For some users, it just might be.

Facebook Debates a Subscription Model