in 2022, advertising revenue amounted to close to 113 billion U.S. dollars whereas payments and other fees revenues amounted to around two billion U.S. dollars.
With roughly three billion monthly active users as of the second quarter of 2023, Facebook is the most used online social network worldwide.
113/3 = about $38 per user per year
14*12 = $168 per user per year
Which would be a mark-up (a Zuck-up?) of 342%.
You do have to figure though, that it’s only the most active users who will opt to pay $14/month, and it’s those same highly-active users that contribute the most to the ad revenue.
Having no idea how those stats actually break down, we could take a wild guess and do a Pareto Principle 80/20.
Say the top 20% active users constitute 80% of the ad revenue, and those same top 20% all switch to the paid model:
(113*0.8)/(3*0.2) = about $151 per VIP user per year
…which is a lot closer to the $168. Zuck-up of about 11%.
80/20 is probably cutting them too much slack, but the real markup is probably closer to 11% than it is to 342%.
This is also not factoring the extra operational expense of supporting the new model.
—
Math part over, here’s my take:
This is good.
Ad-based models are toxic. We poisoned our culture, bulldozed our privacy, distorted the economy, gave unfathomable power to immature narcissistic opportunists, and underdeveloped public FOSS tech because we expected privately-owned services to be Free™ even though they could never be literally free.
This is a move towards unmasking these services and revealing the real economic gears whizzing around behind them.
The more people understand what their privacy and autonomy is worth to these companies, the more they might insist on keeping it — and maybe even seek out places where they don’t have to pay for the privilege.
Good to note that this isn’t even hypothetical, it literally happened with cable. First it was ad-funded, then you paid to get rid of ads, then you paid exorbitant prices to get fed ads, and the final evolution was being required to pay $100+ for bundles including channels you’d never use to get at the one you would. It’s already happening to streaming services too, which have started to bundle.
I don’t think the arguments made by you and OP are mutually exclusive. Facebook is a rotten company and we shouldn’t even be using their website, let alone paying them for the privilege. But Websites aren’t free to operate, Ads are toxic, and we shouldn’t let Ads be the method by which Websites pay their costs.
If OP weren’t posting their argument in a thread about Facebook, but Lemmy instead for example, I think your read might be different. Their last sentence, to me, indicates that they agree with you.
To be clear: When I say “This is good”, I don’t mean that this makes Facebook a good service. You’re 100% right about Facebook’s trajectory here.
My hope lies in improving consumer expectations, and tech entrepreneurs’ estimation of those expectations. For about 20 years, there’s been a universal assumption that users will never pay for a website, ever. They’ll pay with their privacy and attention all day long, but their wallet? Not gonna happen.
If this proves that there are users who will pay with their wallet instead of their soul, then it paves a way for people who are interested in making ethical services – people who may have been discouraged in the past because they were told that the only way to keep the lights on was to round up their users and feed them to a hungry pack of advertisers.
I made space for us both to be right here, cuz you pointed out a way for my original comment to be misinterpreted and I agreed with your thoughts on that misinterpretation.
I agree, in principal. I think the internet as a whole would be healthier if more sites weren’t so averse to offering paid ad-free/premium upgrades early on. Now people are used to getting everything for free, heavily subsidized by invasive advertising and until recently a bottomless pit of venture capital. It’s resulting in very nasty changes to these platforms as many try to find some pathway to sustainability that can be executed in 3-6 months.
When you get something free with advertising, you are the product. That is why enshittification takes hold so aggressively, because making you happy is not the primary means by which they bring in money to pay the bills.
However, at this point I have 0 faith in Facebook to actually do anything good, and I’m sure they will find some way to fuck this up entirely.
The math doesn’t need to make sense because the only reason they are doing this is to get around EU regulations. They are just providing a ad free experience option to make the EU happy.
You do have to figure though, that it’s only the most active users who will opt to pay $14/month
I’d say it’s more likely to be the most wealthy users who will pay the $14, and it seems plausible that the most devoted facebook users might care less about avoiding the ads than people who are there only reluctantly. So maybe slightly closer to the middle of that 11% to 342% range.
113/3 = about $38 per user per year
14*12 = $168 per user per year
Which would be a mark-up (a Zuck-up?) of 342%.
You do have to figure though, that it’s only the most active users who will opt to pay $14/month, and it’s those same highly-active users that contribute the most to the ad revenue.
Having no idea how those stats actually break down, we could take a wild guess and do a Pareto Principle 80/20.
Say the top 20% active users constitute 80% of the ad revenue, and those same top 20% all switch to the paid model:
(113*0.8)/(3*0.2) = about $151 per VIP user per year
…which is a lot closer to the $168. Zuck-up of about 11%.
80/20 is probably cutting them too much slack, but the real markup is probably closer to 11% than it is to 342%.
This is also not factoring the extra operational expense of supporting the new model.
—
Math part over, here’s my take:
This is good.
Ad-based models are toxic. We poisoned our culture, bulldozed our privacy, distorted the economy, gave unfathomable power to immature narcissistic opportunists, and underdeveloped public FOSS tech because we expected privately-owned services to be Free™ even though they could never be literally free.
This is a move towards unmasking these services and revealing the real economic gears whizzing around behind them.
The more people understand what their privacy and autonomy is worth to these companies, the more they might insist on keeping it — and maybe even seek out places where they don’t have to pay for the privilege.
—
Sources:
https://www.statista.com/statistics/268604/annual-revenue-of-facebook
https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/
deleted by creator
Good to note that this isn’t even hypothetical, it literally happened with cable. First it was ad-funded, then you paid to get rid of ads, then you paid exorbitant prices to get fed ads, and the final evolution was being required to pay $100+ for bundles including channels you’d never use to get at the one you would. It’s already happening to streaming services too, which have started to bundle.
deleted by creator
I don’t think the arguments made by you and OP are mutually exclusive. Facebook is a rotten company and we shouldn’t even be using their website, let alone paying them for the privilege. But Websites aren’t free to operate, Ads are toxic, and we shouldn’t let Ads be the method by which Websites pay their costs.
If OP weren’t posting their argument in a thread about Facebook, but Lemmy instead for example, I think your read might be different. Their last sentence, to me, indicates that they agree with you.
deleted by creator
To be clear: When I say “This is good”, I don’t mean that this makes Facebook a good service. You’re 100% right about Facebook’s trajectory here.
My hope lies in improving consumer expectations, and tech entrepreneurs’ estimation of those expectations. For about 20 years, there’s been a universal assumption that users will never pay for a website, ever. They’ll pay with their privacy and attention all day long, but their wallet? Not gonna happen.
If this proves that there are users who will pay with their wallet instead of their soul, then it paves a way for people who are interested in making ethical services – people who may have been discouraged in the past because they were told that the only way to keep the lights on was to round up their users and feed them to a hungry pack of advertisers.
deleted by creator
Look.
I made space for us both to be right here, cuz you pointed out a way for my original comment to be misinterpreted and I agreed with your thoughts on that misinterpretation.
But you clearly just want to fight now.
I agree, in principal. I think the internet as a whole would be healthier if more sites weren’t so averse to offering paid ad-free/premium upgrades early on. Now people are used to getting everything for free, heavily subsidized by invasive advertising and until recently a bottomless pit of venture capital. It’s resulting in very nasty changes to these platforms as many try to find some pathway to sustainability that can be executed in 3-6 months.
When you get something free with advertising, you are the product. That is why enshittification takes hold so aggressively, because making you happy is not the primary means by which they bring in money to pay the bills.
However, at this point I have 0 faith in Facebook to actually do anything good, and I’m sure they will find some way to fuck this up entirely.
The math doesn’t need to make sense because the only reason they are doing this is to get around EU regulations. They are just providing a ad free experience option to make the EU happy.
I’d say it’s more likely to be the most wealthy users who will pay the $14, and it seems plausible that the most devoted facebook users might care less about avoiding the ads than people who are there only reluctantly. So maybe slightly closer to the middle of that 11% to 342% range.
Thanks for breaking that down, I was trying to find the per user amount
m/TheyDidTheMath
Come on man, let that shit die with Reddit!
Good insight. We must protect @bug at all costs.
I need all the protection I can get now Big Subreddit are after me!