Meta’s “overpriced” ad-free subscriptions make privacy a “luxury good”: EU suit
A consumer group in Europe, BEUC, alleges:
"The very high subscription fee for ‘ad-free’ services is also a deterrent for consumers, which means consumers do not have a real choice."
Reading this I assumed the price Meta announced would have been comically high, but I'm not so sure:
On October 30, Meta announced it would begin offering people in the EU, the European Economic Area, and Switzerland a choice between paying a subscription fee to opt out of any personalized advertising or consenting to ad targeting to continue accessing Facebook and Instagram for free.
The fee on Facebook costs 9.99 euros/month on the web or 12.99 euros/month on iOS and Android, which currently covers linked Instagram accounts. However, starting March 1, 2024, costs will go up. After that date, linking your Instagram or additional Meta accounts to your subscription will cost an extra 6 euros/month on the web and 8 euros/month on iOS and Android.
If this seems too expensive to anyone, they probably haven't done the basic arithmetic on just how much money Facebook and Instagram print with advertising. I'm sure for many "whales" that are really hooked on Instagram, Meta would be making significantly less money from them if they paid 16 euros a month to avoid seeing ads.
And if that's the case, then what's this suit here to prove? That people's attention is too valuable? Seems like the wrong angle of attack.
We're seeing the same thing with the video streaming platforms now. As soon as they started adding ad-supported tiers they realized it was way easier to increase revenue per user with ads than turning the screws on customers by raising rates in a soft economy. Once price increases started to drive more churn than revenue, they realized they couldn't afford not to raise prices on ad-free tiers further:
New data from eMarketer seems to explain why Netflix is so keen to get its subscribers to watch ads. The company just provided estimates of what ads on each of the top SVOD services cost. In Q3 2023, Netflix sold its ad slots for an average of $49.50 per thousand views (CPM.[i]) Disney+ was slightly behind at $46.11, and Peacock and Hulu were lower at $38.40 and 23.62, respectively.