This topic reminds me of the Warren Buffet quote “It's only when the tide goes out that you discover who's been swimming naked.”
The headline here can be summed up in this excerpt: “For the longest time, social media companies have relied on the fact that their service is “free” to use. All these companies banked on showing ads and getting some user data in return to let them use social networks without any charge. Now with declining revenues and tough global economic conditions, social networks are resorting to offering subscriptions in one way or another. These paid plans can unlock features ranging from vanity checkmarks to exclusive stickers to increase reach and more.”
But I have to ask, is this value creation or a desperate attempt to hemorrhage the bleeding from a mass exodus of customers and advertisers?
Meta recently took a page out of Twitter’s playbook and announced their own paid subscription service for Facebook and Instagram, ‘Meta Verified’, granting users a hallowed blue check for a monthly fee.
According to ship steward, Mark Zuckerberg, subscribers receive the following benefits from his new paid service:
- A Blue Badge with Verified Account
- Proactive Account Protection
- Direct Access to Customer Support
- Increased Visibility in Comments and Recommendations
- Exclusive Stickers
I get it. The blue badge verification is a vanity status symbol on public platforms. This plus the impersonation protection touches the 1%. And the customer support would normally be a throwaway. However, in classic Facebook fashion, Zuckerberg is already saying that the direct access to customer support will cost “a significant amount of money,” which will be made up for with subscription revenue. The increased visibility in comments and recommendations is mildly interesting, but personally, I’ve outgrown stickers.
My question is when you look at these benefits, where is the value creation? Where's the substance? Or does this stink of desperation? It doesn’t check my box, but public platforms largely don’t do it for me anyway. I’ve found my peace in smaller, high trust groups where people use real names and photos on GroupSpot. I’m happy with a few genuine comments over thousands of likes. We all have our unique needs.
So how does the new subscription service work?
Meta Verified will cost $11.99 a month on the web and $14.99 a month on iOS. It’s launching in Australia and New Zealand this week ahead of a wider rollout.
Why the change?
Things don’t sound rosy in Menlo Park. According to the Post, “Meta has faced its own problems over the past year and a half, with shares of the company’s stock down about 54% since its September 2021 high. The social media giant has laid off about 11,000 workers in recent months, part of a wider downturn among big tech companies.”
Facebook & Twitter are Not Alone…
This reminds me a quote that stuck with me that came from Eric Silverberg, CEO & Cofounder of dating site, ‘Scruff.' He touched on this very topic of delivering value and subscription vs ad driven businesses. You can watch it here: starts at the 17 minute mark.
“(For Scruff) We really worked to figure out our model to build our audience organically. I think if you take a patient approach, understand what value you’re trying to create, you will find people who are willing to pay and you will be able to build a business model that is not based on selling the data of your members.”
I love everything Silverberg says here even if the presentation is a few years old now. I believe what he says to be true. And these are words coming from someone who has done it in his own, unique space with massive success.
Silverberg expanded on this topic: “Running ad driven business models are especially difficult these days. My recommendation, quite frankly, is to focus on delivering something of tremendous value to the audience that you serve. Find something that you believe there is an audience who’s willing to pay for and keep your burn rate as low as possible.”
All GroupSpot has done from day one is ‘focus on delivering something of tremendous value to the audience that we serve,’ something people will ultimately pay for. I was especially encouraged to hear these words… And btw we keep our burn rate low.
Personally, I find value in the community, utility, and privacy. These are tenets GroupSpot is committed to delivering. Just yesterday, I was writing an email to a new customer, Rob Sgarlata, Georgetown’s Head Football Coach. I was telling him about GroupSpot and I wrote “We provide a sense of community for members, unlimited utility for admins, and airtight privacy for all in a closed group setting.” That summed up the value we’ve promised to deliver his Hoyas football team. And that’s the value I’m betting people will pay for in the not too distant future.