Why Facebook will never do subscriptions

It was a week where the media finally started pushing Facebook around data, privacy and its lackadaisical approach to it all. And despite all the sound and fury, we will soon move on, and nothing really will change. And the reason for that is money — or rather how it makes money. Data and engagements are the foundation on which Facebook’s empire of near monopolistic micro-advertising stands, as I explained in my previous essay. In order for the system to work, like a hungry monster, it needs more data, more usage. The busier the feed, more advertisers will have to pay to find ways to get the attention of the users.

The argument against Facebook’s advertising model is often countered by the idea of “monthly subscriptions.” Well, Facebook CEO Mark Zuckerberg put a bucket of cold water on that idea in his conversation with the New York Times:

Now, over time, might there be ways for people who can afford it to pay a different way? That’s certainly something we’ve thought about over time. But I don’t think the ad model is going to go away, because I think fundamentally, it’s important to have a service like this that everyone in the world can use, and the only way to do that is to have it be very cheap or free.

To my ears, that sounds like yada, yada, yada. If you read Facebook’s financials, you can clearly see why Mark loves advertising. To make it easier, I put together this easy to understand graphic. In North America, Facebook makes more money than Netflix and even Spotify. And that’s with more than three times the number of subscribers. Like I said, things aren’t going to change anytime soon!

A letter from Om

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