As anticipated, an increasing number of social media platforms are now attempting to provide more expensive, ad-free membership options in order to comply with the EU’s changing data privacy laws. They are also attempting to gauge the amount of users who would be prepared to pay for an ad-free in-app experience.
With its new, more costly Snapchat+ subscription, which will eliminate the majority of adverts from your in-app experience, Snapchat is the most recent app to test this out.
Also Read: What Does Subscription Mean on Snapchat
As Jonah Manzano’s sample summary shows, certain Snap users can now opt for the more expensive Snapchat+ membership tier, which gets rid of all Story and Lens commercials. Snapchat said that as it tests the best methods to monetise its AI chat platform, users may still see sponsored locations and paid advertising within My AI answers.
However, users will be able to remove advertisements from the app for the most part, all for the affordable monthly fee of $15.99 AUD, or $10.50 USD.
In contrast, the current price of the $5.99 AUD indicated in the graphic above is about equal to the $US3.99 monthly plan for Snapchat+.
Given Snap’s reliance on ad income from the North American market, it appears that the option is not now available in the U.S. and may never be.
These data show that American and Canadian users account for the great bulk of Snap’s revenue. Using these numbers as a reference, Snap may consider raising the price of its ad-free tier in the United States.
However, it wouldn’t necessarily have to. Since these are quarterly income figures, Snap would be making less than US$3 per U.S. user per month from ad exposure, which would more than balance any associated losses if it charged US$11 per month for an ad-free alternative.
For Facebook, which depends on ad income to produce around $US6.30 per U.S. user every month, the same equation becomes more complicated. However, Snap’s revenue from its advertising business isn’t as high, so there could be more possibilities here.
Also Read: The Ulitmate guide to White Label Facebook Ads
Nonetheless, the European Union, compliance with the most recent data usage standards, and the ability for European customers to refuse targeted advertisements if they so want are probably the primary concerns.
By providing users with an ad-free opt-out, albeit at a cost, Meta appears to have discovered a way around this new rule. Users may then prevent Meta from utilizing their data for ad targeting, provided they are willing to pay for the privilege. Instead of users having to pay for this, Meta would probably prefer that they continue to allow it to operate its advertising business. However, by offering the choice, Meta guarantees that it complies with the new EU regulations in this regard.
Only users in the European Union are allowed to use Meta’s ad-free version, which costs $US10.60 a month.
TikTok is also experimenting with an ad-free direct payment option along these lines (price TBC), while X is also providing an ad-free “Premium” membership, at $US16.99 per month.
Even while it could appear that this is a part of a larger trend where companies are charging users to use their applications, the primary goal here is probably complying with EU regulations because most platforms make far more money from advertising exposure than they would from consumers purchasing app access.
Because, in all honesty, the majority of people just won’t pay whatever the amount is.
This has already been observed with all of the different subscription choices. While 0.67% of Snap users pay for Snapchat+, less than 0.5% of X’s users have signed up for X Premium thus far. It is estimated that 6% of LinkedIn users pay for LinkedIn Premium, whereas 4% of YouTube users subscribe to YouTube’s Premium/Music services.
For each of these platforms, they currently offer a significant additional revenue source. However, they don’t even come close to producing as much as they do from advertisements.
Furthermore, the data indicates that not many users will care enough to join up at a monthly cost as an alternative, even if each app will be curious to discover how many users are prepared to pay to remove adverts.
If and when each is genuinely made available to all users, you might want to give this some thought if you truly detest advertisements.
The ad-free Snapchat+ service is “rolling out slowly and may not be available to you just yet,” according to Snapchat.