alt Hacker NewsDon’t underestimate how expensive ads are and thus how much money they can bring in. Marco Arment, the developer of Overcast podcast player, has made remarks in the past about how the ad-supported version is completely viable and may actually make him more money per user than the price of his paid option. In his case, he runs his own contextual ad system. Obviously Meta is in a completely different league in terms of sophistication, meaning they are probably able to sell more targeted ads which means more money, and they also have the luxury of not having to pay any middlemen since they own their own ad infrastructure as well.
Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost.
Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. This means that the price it would be it would cost would need to be 42% above than its ad ARPU just to break even.
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> Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost.
The ad-free one doesn’t have to cost more than the ad-supported ARPU. There’s a pretty reasonable argument to be made that social media services with near-ubiquitous uptake should be regulated as utilities, and regulators could reasonably place the price at cost + a marginal profit margin as determined to be reasonable, like they do for other utilities that are privately-owned.
> Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly.
They don’t have to offer paid subscriptions via IAP.
The flip side of this is to consider why those ads are so valuable. If advertisers are consistently getting paid that much, it's because the ads are successful in extracting at least that much extra profit from the users. Which presumably comes from all the superfluous purchases they make.