Meta, the parent company overseeing Facebook and Instagram, is in the works to launch a paid subscription service in Europe. This service will grant users ad-free access to both platforms. The move comes as Meta faces declining ad revenue amid competition from TikTok and privacy changes implemented by Apple.
Meta confirmed the subscription plan after the Verge reported it based on an internal company document. The document indicated Meta aims to launch the subscription product in the fourth quarter of 2023.
The subscription is expected to cost around $11-14 per month, though pricing has yet to be finalized. Subscribers would gain access to Facebook and Instagram without ads. Meta is considering tying access across both platforms to a single subscription.
The introduction of a paid tier could supplement Meta’s ad-based business model amid ongoing economic challenges. Ad spending has declined in the current financial downturn. Meta has also taken a hit from Apple’s privacy changes, which allow iPhone users to block tracking required for targeted ads.
However, a subscription model also carries risks and challenges. Meta will have to convince users to pay for services they currently get for free. It needs to be determined how many users will be willing to pay a monthly fee. Ad-supported access could become worse if higher-spending subscribers opt for the paid tier.
The launch is focused on Europe for now, where Meta has more users. However, the company likely hopes to expand it further if successful. The subscription could help Meta diversify revenue and hedge against disruptions to targeted advertising.