Meta Launches Paid Facebook, Instagram Subscriptions in Europe
Meta Platforms is debuting ad-free Facebook and Instagram subscriptions in Europe in response to increasing regulations about how user data is collected and used on the continent.
“In November, we will be offering people who use Facebook or Instagram and reside in these regions the choice to continue using these personalized services for free with ads, or subscribe to stop seeing ads,” Meta said in a statement. “While people are subscribed, their information will not be used for ads.”
The subscription services will be offered to anyone in the European Union, Iceland, Liechtenstein, Norway and Switzerland. Facebook has about 307 million daily active users in Europe, the company said last week in its third-quarter report. It did not break down Instagram users but analyst estimates put that total at about 295 million.
The social media sites will charge €9.99, or about $10.58, per month for users to see scrolls without advertising on the web, or €12.99, about $13.75, on mobile, no matter how many accounts the user has. After March 1, the cost will rise by €6, or $6.35, for each account.
Meta has not launched Threads, it’s X rival, in Europe in part because of the regulations under the EU’s Digital Markets Act that prevents tech companies from sharing data between services, Bloomberg reported.
Citi analyst Ronald Josey wrote in a note to clients that the subscription tiers removes a key pressure on the company’s stock created by the regulations. By offering an advertising-free subscription service, Meta can satisfy the European Union’s GDPR “consent basis” for collecting data in a likely revenue-neutral manner given the company plans to continue offering its core ad-supported service to most E.U. users, he wrote, according to TheFly.com. Citi kept a “Buy” rating on the stock with a $425 price target, implying that he expects the stock to rise more than 29% in the next 52 weeks.
Shares were trading down $2.436, less than 1%, at $300.30 in morning trading Tuesday. The stock has more than doubled since the start of the year.
The company said it has factored the subscriptions into its most recent business outlook and guidance, but did not provide an estimate for how much revenue it expects to draw from the subscriptions.
Advertising revenue in Europe rose to $7.72 billion in the third quarter, the company said last week, from $5.71 billion a year ago.
While Meta has not suggested that it might incorporate paid subscriptions in the U.S. or elsewhere around the globe, the revenue stream for the company this effort could produce may provide an incentive to expand the program.
“We believe in an ad-supported internet, which gives people access to personalized products and services regardless of their economic status,” Meta’s statement said. “It also allows small businesses to reach potential customers, grow their business and create new markets, driving growth in the European economy.”
It continues to advocate for advertising as the basis for the online economy, the company said. “But we respect the spirit and purpose of these evolving European regulations, and are committed to complying with them.”
Ireland’s Data Protection Commission, which oversees Meta for the EU, told Bloomberg it is not yet done determining if the subscriptions will satisfy the requirements under the General Data Protection Regulation, or GDPR.
“The exercise has not yet concluded, and no findings have been made to date,” the commission said in a statement to the news outlet. “It is due to be completed shortly, at which point the DPC will notify Meta if it considers that the manner in which its new user offerings are to be implemented is compatible with Meta’s obligations under GDPR.”
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