The comments from Facebook’s COO about people paying for the social networking service if they want an ad-free experience has sparked quite a debate online. While Facebook’s founder and CEO, Mark Zuckerberg, is vehemently against this idea today, there’s a possibility that the social networking giant ends up offering a paid and ad-free version of Facebook down the line.
However, how much would Facebook have to charge its users to offset the revenue decline? As per some analysis by Josh Constine over at TechCrunch, Facebook would have to charge anywhere between $11 to $14 per month to offset the loss of its revenue. An average US or Canada user helps Facebook in earning $7 per month from ads. However, once you factor in the loss of advertising revenue and the number of users actually willing to pay, the subscription fees jump to $11-$14.
That definitely might not seem a lot for people living in the United States and Canada, which generates the most revenue for Facebook, but the number of people willing to pay for the service is probably limited to the rich. This, in turn, means that even in Facebook’s best market, a paid subscription offering — at best — will meet with below average to moderate success.
Things are even less rosy when you look at markets outside of the United States and Canada where people don’t have a high disposal income. Facebook users in India, which is a huge market for Facebook, are unlikely to shell out such a steep amount for the social networking service. Even a subscription fee of $1.99 per month will find few takers in the country.
An average Facebook user is unlikely to shell out $11 to $14 per month for the social networking service. Sure, it acts a way for them to connect with their long lost friends and keeps them up to date with what’s happening in their lives. But that’s not a good enough reason for most people to pay for Facebook. Instead, they will happily accept the ad-infested version of the service even if that puts their personal data at risk.
There’s a reason why Facebook’s founder Zuckerberg wants to keep Facebook free for everyone. He wants the service to be freely available to everyone and make it like a basic human right.
Zuckerberg endorsed the merits of ad-supported apps, but never ruled out letting users buy a premium version. “We don’t offer an option today for people to pay to not show ads” Zuckerberg said, later elaborating that “Overall, I think that the ads experience is going to be the best one. I think in general, people like not having to pay for a service. A lot of people can’t afford to pay for a service around the world, and this aligns with our mission the best.”
Would you be willing to pay $11 for a Facebook subscription that will offer an ad-free experience and put a greater focus on your privacy?[Via TechCrunch]