Meta has announced new subscription products for Facebook, Instagram, and WhatsApp. Among other things, this cultivates subscription revenue for Meta, which can diversify its top line amidst a challenged ad revenue landscape. This was also likely inspired by Snap’s success in doing similar.
Before getting into these strategic drivers, what did Meta roll out exactly? It now offers new subscription options for users across its apps, as well as business and creator subscriptions. Starting with user subscriptions, they offer early-access features, profile customization, “super reactions,” and analytics.
For example, paid subscribers have access to visual features to dress up their profiles, and can view advanced stats for the Stories they publish, such as who viewed them. The cost is $3.99 per month for Instagram Plus and Facebook Plus, while WhatsApp Plus will be a bit cheaper at $2.99 per month.
As for professional subscriptions, they’re meant for creators, businesses, and heavy AI users. Branded as “Meta One,” these subscriptions offer AI-driven automations like heavy image generation for marketers and content creators. Its flavors are Plus ($7.99/mo), Premium ($19.99/mo), and Advanced ($49.99/mo).
For now, Meta’s existing subscriptions aren’t going away, such as Meta Verified – which for verification, support, and impersonation protection. It’s likely that all these plans will be unified for simplicity at some point, but Meta hasn’t announced that. Meanwhile, more features will be rolled out over time.
Cloning & CapEx
Back to strategic drivers, these new subscriptions are ostensibly moves to diversify Meta’s revenue. This comes at a time when several macro factors compel revenue diversification. For example, Meta’s capital expenditures in building out data centers and AI infrastructure are reaching into the stratosphere.
It’s unlikely that “Instagram Plus” will put a dent in offsetting those CapEx dollars anytime soon. But if nothing else, subscription revenue could signal to Wall Street that Meta is making active moves to grow its top line. Wall Street concerns over Meta’s CapEx spending spree have accelerated recently.
As noted, Meta’s subscriptions play is also modeled after Snap’s success. Its flagship subscription, Snapchat+, is riding a $1 billion run rate. As we’ve written, this is a lynchpin in Snap’s revenue turnaround and efforts to carve out new and diversified revenue streams as the ad world faces headwinds.
In short, those headwinds involve more supply and less demand. The former is due to a growing array of options where marketers can place their chips. The latter involves shrinking ad budgets due to economic conditions, as well as marketers getting savvy with generative AI and shifting resources to earned media.
Meta faces the same set of factors. But given its track record in copying Snap outright (e.g., Stories), it isn’t subtle in this latest play. Its feature set, pricing, and naming are nearly identical as “Instagram Plus” sounding just like “Snapchat+” even if they’re spelled differently. We’ll see if Meta can pull it off.
Header image credit: Dima Solomin on Unsplash
