Meta Jumps On Twitter’s Bandwagon, Introduces Premium Subscription Model For Facebook And Instagram

Key Takeaways

• Meta is introducing a premium service aimed at content creators on Facebook and Instagram
• Twitter was the first social media platform to introduce a subscription model after targeted ads are come under increasing scrutiny
• While subscription models may not be popular with users, AI could hold the key for Meta’s revenue woes

Meta has jumped on the subscription bandwagon. It’s announced Facebook and Instagram, which have active user bases of 2.9bn and 2bn respectively, will now have a paid-for service called Meta Verified.

The move comes following Twitter’s rocky launch of Twitter Blue, with Meta being the first Big Tech company to follow suit, and a challenging regulatory climate as advertising-reliant Meta looks to change course.

So what exactly has Meta introduced – and how significant is this move? Let’s get into the detail.

Times in the technology sector are changing. With Big Tech evolving to stay afloat and the rise of AI, it’s an exciting time to invest in the field. Q.ai’s Emerging Tech Kit neatly packages diversified ETFs, stocks and even crypto together to bring you a diversified tech portfolio – all made possible with our AI technology.

Download Q.ai today for access to AI-powered investment strategies.

What has Meta announced?

On Sunday Mark Zuckerberg, CEO of Meta, took to Facebook to announce a new subscription model called Meta Verified for the social platform and its sister, Instagram. “This new feature is about increasing authenticity and security across our services,” Zuckerberg said.

The post pointed to nifty new features like government ID verification, a blue badge (if you don’t have one already), extra impersonation protection and a beefed-up customer support system.

Content creators are the target audience. “Some of the top requests we get from creators are for broader access to verification and account support, in addition to more features to increase visibility and reach,” Meta said in a statement.

Users will need to fork out $11.99 a month for Meta Verified; iOS users will inexplicably pay $14.99 a month for exactly the same service. Yep, we’re scratching our heads on that one too.

Australia and New Zealand are the lucky countries to get first access to Meta Verified, with more countries to follow soon.

What was the market reaction?

This latest announcement had Meta’s stock holding steady. Meta has been doing well in the markets lately, despite other tech companies remaining sluggish after a dreadful 2022 for the sector. Meta stock prices are up 44% from the start of the year for several reasons.

Its Q4 earnings results showed better-than-expected figures, including total revenue and average daily users, despite Meta’s net income profit plunging by over half. The announcement sent the stock soaring 20%.

The social media giant has also announced over 11,000 employees were losing their jobs as part of Zuckerberg’s ‘year of efficiency’. It’s rumored another round of layoffs will soon be on the way.

Is Twitter a trendsetter?

It would appear so. After Elon Musk became CEO of Twitter in October last year, Twitter Blue was one of the first ideas to go live. For $8 a month, Twitter users can get a blue tick and exclusive features like editing tweets and NFT profile pictures.

Its launch was disastrous, with users buying blue ticks to impersonate high-profile companies and celebrities. It was pulled and then delayed twice before re-launching in November. Sales have since been meager, apparently only hitting 180,000 subscribers in two months.

But with Meta following suit, his gamble may have paid off. With Twitter very publicly working through the pain points of what a subscription model could look like, other Big Tech giants have taken notes. Elon took to the platform to express his amusement at Meta’s move in a single word: “Inevitable”.

After the changes in the market, we can’t help but think he might be right – because Big Tech has a big problem.

Advertising, regulation and Apple

It’s easy to say that Zuckerberg is just trying to make a quick buck off users after Twitter introduced its subscription model. In reality, there’s something deeper going on here.

The problem all big social media companies face is that their ways of making money are almost entirely tied to advertising. Facebook’s 2022 revenue came in at $116.6bn – $113bn from advertising. That’s a whopping 97.5%.

In April 2021, Apple lobbed a grenade. It introduced a feature on the Apple Store where apps had to ask users permission to track their activity, rendering targeted advertising far less effective than before. It’s had a massive impact on Meta, blowing a $10bn hole in their 2022 revenue.

Meta is acutely aware of its vulnerability. In a leaked internal memo, Chief Marketing Officer Alex Schultz said Meta was “still at the whim of Apple”

Regulators have also taken note of Big Tech’s repeated failure to protect user data. In an EU ruling last month, Meta was found to have broken EU data laws with its personalized ads. The company was fined £343m for the transgression and may have to introduce an ‘opt-in for ads targeting’ option for Meta users.

Back in 2004, when people didn’t have a clue about personal data, Meta (than Facebook) thrived. Now, it risks obsoletion if it can’t diversify its revenue into other avenues.

Subscription services are low-hanging fruit, but one disruptive technology could change the game.

AI: the next money-making frontier?

Other companies like Google and Microsoft have been louder about their AI capabilities, but that doesn’t mean Meta isn’t right up there with them.

Meta recently unveiled Cicero, an AI that’s the first to beat humans at the war strategy game Diplomacy. “Learnings from technology like this could one day lead to intelligent assistants that can collaborate with people,” Meta said.

The company has also been using AI to boost existing products like Reels, which it wants to push as a challenger to TikTok. In the Q4 earnings call, Zuckerberg said relevant content was being recommended to users by its AI systems.

Its big bet on the metaverse, a virtual reality world for users, is also utilizing AI – though any mention of that project is firmly put on hold as investors look for firm signs Meta is running lean.

With Meta’s revenue closely linked to advertising, AI seems to have an increasingly prominent role in Meta. If it can offer personalized ads without the cost to people’s privacy, it might be the holy grail technology to secure the company’s long-term future.

The bottom line

As the world wonders which company is next to adopt a subscription model, things are changing in the upper echelons of social media platforms.

Whether the move will be a success or if they find a new way to make money, it’s clear Meta’s golden age of targeted ads is drawing to a close.

Big Tech isn’t the only thing looking to rebalance. Our artificial intelligence-powered Kits, like the Emerging Tech Kit, are always looking for the best mix of data to generate returns. As the tech industry rapidly evolves, you can let AI capitalize on the best investments for your portfolio.

Download Q.ai today for access to AI-powered investment strategies.