Meta and TikTok test ad-free monthly subscription programs

Due to falling ad revenues and heightened digital advertising competition, social media firms are exploring alternative income sources like subscription-based models.

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ByteDance-owned TikTok is currently testing a $4.99 monthly subscription plan that would eliminate ads for users in a single English-speaking market outside the US. The short-form video platform confirmed that it will pilot the option in an English-speaking market outside the US, and the test is small-scale and does not guarantee an imminent product launch. TikTok currently presents tailored advertisements to users aged 18 and older.

Instagram and Facebook are also reportedly eyeing a similar model in the EU, with reported prices floating between €10 and €17 for desktop users and €13 to €19 for mobile, to accommodate the commissions imposed by Apple’s and Google’s app marketplaces. In August, the company announced its plans to alter its terms in response to the EU’s Digital Services Act (DSA). It aimed to seek users’ consent before showing advertisements that use their personal information.

Why does it matter?

Social media companies have traditionally relied on advertising as their primary source of revenue. However, with the decline in ad revenues and the increasing competition in the digital advertising landscape, social media companies are exploring alternative revenue streams, including subscription-based models.

The move towards offering multiple tiers of service to users is a growing trend. Other social media platforms like Snapchat and X (formerly Twitter) offer paid subscriptions, but neither provides an ad-free viewing experience. The prospect of ad-less scrolling in the US appears slim for now, as companies might be reluctant to loosen their grasp on the US’s huge advertising market, while in the EU, the increase in regulations might make this a more viable option.