Social Media Platforms Introduce Subscription Models: Will Users Pay for Premium Features

August 1, 2023 (2 months ago)
Will Users Pay For Premium Features

Social media Subscription Models platforms have been the primary source of communication and entertainment for billions of people worldwide. However, as revenue growth slows, brands cut back on advertising, and Apple changes its policy settings, social media platforms are exploring new avenues to generate revenue. One such model that is gaining popularity is subscriptions. In this article, we will discuss why social media platforms are using subscription models, what each subscription costs and offers, and whether users will pay for something that has been free since its inception.

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Why Social Media Platforms are Using Subscription Models?

For a long time, social media companies offered free apps with ads as a way to generate revenue. However, in the last year or two, revenue growth has slowed, and some companies have seen declining year-over-year revenue. Additionally, the fear of a recession and inflation has led brands to cut back on ad spending. In 2021, Apple changed its policy settings, making it harder to show people specific ads that might appeal to them and that they might click on and buy something from, which is what they want you to do- targeted advertising. As a result, social media platforms are now offering subscription models to boost revenue.

Twitter Blue and Its Pricing

Twitter Blue is one such subscription model that offers users a range of features that are not available in the free version. For instance, it offers the ability to undo tweets up to 30 seconds after posting. Although Twitter Blue was not popular when it first launched, when Elon Musk bought Twitter, he revamped Twitter Blue and changed the pricing. The subscription costs eight dollars on the web and eleven dollars on an iOS device. The pricing is different because historically, if you buy something in an app on an iOS device, Apple takes a cut of that.

Meta’s Subscription Offering and Its Cost

Last week, Meta announced that they would be introducing a subscription offering, which they are testing in Australia and New Zealand. The subscription costs 11.99 dollars on the web and 14.99 dollars on an iOS device. It is either for Facebook or Instagram, so if you want the verification or the subscription service on both, you will have to pay twice over. The subscription offering includes enhanced customer support service, which is something that Meta has not offered before.

Snap’s Subscription Offering

Snap’s subscription offering is different from other social media platforms because it allows users to customize the app. For instance, users can create custom notification sounds for their friends, change the wallpaper of their chat screens, and pin someone as their best friend. The subscription costs 3.99 dollars a month, and it has been out for only six months, but it already has 2.5 million subscribers.

Will Users Pay for Subscription Models?

The success of subscription models depends on how many users are willing to pay for them. Although there are people who say they do not want to pay for social media at all, there are others who might be willing to pay for subscription models, especially if they are influencers or someone who is trying to get more reach on social media. However, for these subscription models to be a meaningful source of revenue, social media platforms need many users to subscribe to these programs. Twitter has estimated that about 300,000 users are paying for Twitter Blue, a small sliver of its more than 230 million daily active users. Similarly, Snap has 2.5 million subscribers, which is less than one percent of all its users. Bank of America predicts that Meta could have 12 million subscribers within a year, but only time will tell if that estimate is accurate.

Subscription Model

Although the subscription model could provide social media sites with a new stream of income, it is still unclear whether consumers would be ready to pay for something that was previously free. Users who are used to using social media for free could object since they don’t see the use in paying for more services or better customer support.

The number of people who are willing to pay for these subscription services will also determine how successful they are. As was already mentioned, Twitter Blue is now only subscribed to by a small portion of Twitter users. Social media businesses will need to persuade a substantially bigger fraction of their user base to join up if they want these subscription options to be a significant source of revenue.

It will be interesting to watch how these subscription options develop over the next months and determine whether they will eventually become the standard for social media networks. Would customers accept the value of paying extra for greater features and customer support, or will they object to paying for something that was previously free? Time will only tell.

Conclusion

In conclusion, social media platforms are now offering subscription services to users who want more reach, security, or customer support. While the traditional business model of these companies relied on advertising revenue, factors such as slowing revenue growth and changes to policy settings by companies like Apple have led them to explore new ways of generating income. However, it remains to be seen whether users will be willing to pay for services that were previously free, and the success of these subscription programs will depend on how many users choose to sign up. Nonetheless, it is clear that social media companies are looking for new sources of revenue and exploring alternative business models in the face of changing market conditions.

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