Are Subscription Models the Future for Social Media Platforms?
X’s move is an interesting one, with new and unverified accounts in the trial areas of New Zealand and the Philippines required to pay $1 per year to engage with content. They can continue to view posts without paying, but this goes beyond the pay-for-premium upgrades typically seen on other channels.
Not a large enough sum to annoy people, but enough to offer a significant uplift to X’s bottom line. Though, if you’d believe Musk, that isn’t the main motivation for this decision.
So, why are subscription models becoming more prevalent, and what are the implications? While the obvious answer lies in one word – monetisation – there are a number of motivations.
1. TO COMBAT BOTS
As you’ll have no doubt guessed from the name of X’s new scheme, this subscription model is centred around tackling bots.
X has had a shaky relationship with user trust these last 12 months (and, let’s face it, it was on rocky ground before that). Indeed, Musk himself threatened to walk away from the acquisition of the business in June last year, with a letter to Twitter’s head of legal, policy and trust outlining his concerns.
A study by Cyabra in 2022 – tellingly commissioned by Musk before he purchased the app – estimated that bot and spam accounts made up 11% of the total user base.
With that in mind, it’s no surprise that he’s now looking at any means necessary to combat what is a systemic problem on the channel. On its Not A Bot announcement post, X claims that “so far, subscription options have proven to be the main solution that works at scale.”
Whether it proves successful is yet to be seen, and we’ll watch with interest to see if the volume of spam accounts decreases, and the corresponding platform experience improves.
2. TO TACKLE THE EU’S DIGITAL SERVICES ACT STIPULATIONS
From 1 January 2024, as per the DSA (more about that here) platforms like Meta will need explicit consent from users to receive personalised ads.
It’s no secret that the more a platform knows about you, the more relevant the ads served to you will be – and, in theory, the more likely you’ll be to act on their messages. And, of course, you’ll be enjoying a stronger user experience, without the bore of wading through promoted material that has no relevance to your life or needs.
It’s understandable then that Facebook fears the DSA regulations will dilute both ad performance and user enjoyment of the platform. Saying that, Zuckerberg’s plan to force the issue – users can either opt in to receive personalised ads, or pay to opt out – is a dicey one.
I’m sure the ability to safeguard data is not one the EU believes should be contingent on a person’s ability to pay their way out of it, so it’ll be interesting to see how this strategy plays out.
It’s possible that users willing to pay to opt out had less purchase intent to start with, so it could end up filtering out those audiences less likely to convert, while simultaneously meeting the needs of the DSA.
TikTok – which is operating under the same DSA limitations as Meta – is also testing a $4.99 ad-free experience. They’re keeping quiet about the details for now, with testing allegedly taking place in an English-speaking country outside of the US.
3. TO CREATE AN EXCLUSIVE EXPERIENCE
Looking beyond 2023, it’s clear that premium models have historically been centred around the idea of exclusivity.
Meta’s subscriptions platforms, rolled out on Facebook in 2020 and Instagram two years later, enable users to pay in exchange for “exclusive content, personal interactions and a subscriber badge.”
And X rocked the boat last year with the launch of Twitter Blue, enabling users to purchase blue tick verification (much to the chagrin of those brands and figures who’d fought to get their hands on the much-coveted status symbol).
While Musk made it clear the change was designed to move X away from what he termed a “lords & peasants system”, it didn’t go unnoticed that the $8 per month subscription would simultaneously enable the acquisition of an iconic and sought after form of online currency, devalue the blue tick, and line X’s pockets.
With all these factors at play, the future of social media is unclear. If Musk successfully removes bots and profits from it – talk about killing two birds with one stone – without user numbers suffering as a result, logic suggests other platforms may follow suit.
And, of course, with major players such as Meta and TikTok pivoting their strategy to meet the needs of ever more complex regulations, there’s no limit on what they may introduce as a way of preserving the sanctity of their experience – and making some money in the process.
One thing we can look to is Zuckerberg’s testimony before the Senate in 2018, amid the Cambridge Analytic scandal, when he stated: “there will always be a version of Facebook that is free.” If he keeps his word, an absolute subscription model is off the table.
The social media landscape has always been fast-paced, but the addition of rogue leaders and ever more limiting legislation means it is becoming increasingly unpredictable. So, for now, all we can do is watch and wait.
If you’d like to learn more about social media strategy, feel free to reach out to Alex Dixon, our senior social media strategy director.
The author: Alex Dixon is a senior social media strategy director at WPR who specialises in using Facebook, Instagram, LinkedIn and X to keep clients ahead of the curve when it comes to social media marketing.