9 months ago • 2 mins
Meta announced over the weekend that it’s joining the social media subscription-service club.
What does this mean?
Why should I care?
Zooming in: Meta’s edge.
Meta’s playing a game of catch-up on this one, with rivals Snap and Twitter having already deployed the whole “turn-your-users-into-subscribers” stratagem. But with Twitter's offering pretty slow to take off, it’s far from clear that users are actually willing to pay for perks like these. Mind you, Meta does have a trick or two up its sleeve. First, subscribers will have to verify their identity with a government ID, side-stepping the worries about fraudulent “verified” accounts that plagued Twitter last year. And second, the firm has an edge when it comes to user numbers, so if even a few of its content creators sign up, the rest could end up following suit out of fear of – gasp – social media irrelevancy.
For markets: Valuation potential.
This venture could be a dream come true for Meta’s investors: subscriptions can secure a very reliable stream of cash, giving businesses the kind of predictability that often leads to higher valuations. And with Meta still down 15% from a year ago – despite the cost cuts and share buyback announcements that recently boosted shares – that shot in the arm could be just what the doctor ordered.
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