These are the Key Takeaways

• Meta introduces a premium service for content creators via Instagram and Facebook.
• After targeted ads have come under increased scrutiny, Twitter introduced a subscription model as the first social media platform.
• While subscription models may not be popular with users, AI could hold the key for Meta’s revenue woes

Meta is now a subscriber. 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.

How significant and what has Meta done? Let’s get into the detail.

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What announcements has Meta made?

Mark Zuckerberg, the CEO of Meta took to Facebook on Sunday to unveil a new subscription plan called Meta Verified. It is available for Instagram and other social platforms. “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.

Target audience: Content creators. “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.

Meta Verified users will have to pay $11.99 per Month; iOS users, however, will be charged $14.99 per Month for the exact same service. Yep, we’re scratching our heads on that one too.

Australia and New Zealand have been granted the privilege of first access to Meta Verified. Other countries are expected to follow suit.

Was the reaction of the market?

This latest announcement had Meta’s stock holding steady. Meta’s stock has performed well lately in the market despite the fact that other tech companies remain slow after the terrible 2022 year for this sector. Meta stock prices rose 44% in the last year due to a number of factors.

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. Stocks shot up 20% after the announcement.

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.

Twitter is a trendsetter

This would seem to be the case. Twitter Blue became a reality in October 2013 when Elon Musk took over as CEO. Users can purchase a Twitter blue tick for $8 per month and access exclusive features such as editing tweets or NFT profile photos.

The launch of the service was disastrous. Users bought blue ticks in order to pretend they were celebrities and high-profile businesses. After being pulled, it was again delayed before relaunching in November. Since then, sales have been sporadic and it is believed that 180,000 subscribers were reached in just two months.

However, Meta may be following in his footsteps and this could have been a successful gamble. Other Big Tech companies have been paying attention to Twitter’s open discussion about the pros and cons of a subscription model. Elon joined the platform. 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.

All big social media firms face the problem of their revenue streams being almost exclusively tied to advertising. Facebook’s 2022 revenue came in at $116.6bn – $113bn from advertising. That’s a whopping 97.5%.

Apple dropped a bomb in April 2021. Apple introduced an Apple Store feature that allowed apps to request permission from users to track their activities. This made targeted advertising much less effective. It’s had a massive impact on Meta, blowing a $10bn hole in their 2022 revenue.

Meta is aware of the 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. Meta’s personalized ads violated EU data laws, according to an EU ruling. 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.

Subscriptions are low-hanging fruits, but one disruptive technology may change everything.

AI is the future 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.

AI is also being used to improve existing products, such as Reels. The company wants to compete with TikTok. Zuckerberg spoke out in the quarterly earnings call to say that AI systems were recommending content relevant for users.

The company’s major bet is on metaverse, which is a virtual reality environment for users. However, any mention of the project is currently on hold while investors search for signs that Meta may not be running smoothly.

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.

Bottom line

The world is wondering which company will adopt a subscription model next. However, there are some changes happening in the top echelons 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. The Emerging Tech Kit is one of our artificial intelligence-powered Kits. It constantly searches for the right mix data to produce returns. AI can help you make the most of the rapid changes in the technology industry.

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