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Equity: Verified Subscription The Latest Copy-Cat Idea From Meta, But Will It Be Successful?
Mark Zuckerberg is implementing Elon Musk's strategy of paid verification, but users may find more benefits than Twitter has been able to give.
Meta Platforms announces subscription service
The art of copying in the social media world
The financial effect will it will have on the company
Three months ago, Elon Musk announced an $11 per month subscription service that would grant Twitter users a blue verification check mark. Last Sunday, Mark Zuckerberg and Meta Platforms announced their alternative - a $15 subscription for users to be verified.
This is another step in the social media trend to boost revenues.
Aimed at influencers, not consumers
Although Twitter’s approach was essentially to reduce spam and bot accounts, Meta’s version seems to be aimed at creators, particularly on Instagram, and the real selling point is reach.
Typically, creators earn money by working with sponsors and publishing sponsored content. The number of "likes" a post receives, a metric that typically correlates with views, determines how much money a creator can charge for sponsored content. Moreover, "improved exposure and reach" in search and recommendations are features of Meta's new subscription service.
A creator’s dream is to go viral. Although the corporation has positioned this as about verification, the underlying goal is to increase the likelihood of posts becoming viral.
Is Meta the master of copying?
Whenever a new social media feature trends, Meta jumps on the idea and implements it on one of their platforms.
Snapchat’s Stories became Facebook Stories and Instagram Stories. TikTok was cloned and rebranded as Reels on Instagram. The live video app Periscope started the journey to implement live videos on Meta’s platforms. The next copy could be from the increasingly popular BeReal trend.
Mark Zuckerberg’s implementation of a subscription service for verified accounts looks to be another case of Ctrl C > Ctrl V, but this time Twitter was the source. But can Meta make this transition more profitable than Elon Musk has been able to do?
The revenue estimates
We are not a company that is too interested in the following social media trend. Instead, what we dig into is the business side of all this.
Elon Musk recently joked on Twitter about his acquisition of the same platform.
However, implementing a subscription was his first step in making Twitter a more efficient business. But as of January 2023, only 0.2% of Twitter's US users paid for memberships like Twitter Blue, indicating the struggling nature of the company's latest business move.
But will the results be the same for Meta? Twitter has a low percentage turnover because being verified doesn’t lead to as much benefit as a platform like Instagram would.
Instagram is the grail of social media marketing. Over the years, the app has become flooded with adverts and shopping links on influencer posts.
So, the strategy has a much better chance of succeeding on Instagram thanks to the promise of reach. Many influencers will decide that paying $15 a month to help their content stand out will be worth it. The more their content stands out, the more they can charge for sponsored content.
Now comes the main question. How much can Meta make from this?
Bloomberg Intelligence analyst Mandeep Singh estimates the new service could add $2 billion to $3 billion to Meta’s annual sales, a fraction of Meta’s $117 billion in revenue last year but probably more than what the company is making from the metaverse. Singh said in a note that the service would also help keep creators from moving to TikTok.
Keeping the most engaging creators on Meta's platforms will have a more significant influence than anything else, ensuring millions more users watch Reels instead of TikTok.
The subscription service is initially launching in New Zealand and Australia. Still, as it expands to Europe and the US, creators will evaluate how much of an audience $15 can actually buy.
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