Why are social media platforms moving towards paid subscriptions?

The fame and popularity of social media has been based on people creating content and expressing themselves, mainly for free. But with the events of the last few years, the platforms have seen their level of ad spend reduced, meaning a necessary change of strategy and the growing introduction premium paid subscriptions.

Why the change ?  

For years, users have been allowed to enjoy the benefits of different platforms without the need to pay for any premium fee. In the past, social media companies relied mainly on showing ads and getting some user data in return for letting users create content freely on the social networks. 

However, with the events of the last few years, the world has been hit by a global crisis which has impacted everyone, including social media companies. COVID and its financial impact, as well as the Russia-Ukraine conflict has affected the landscape of the tech industry. 

These online platforms have seen their revenue decrease and budget for marketing reduced. By consequence, social media companies have needed to change their strategy, which includes pressing users towards paid subscriptions. 

What are they offering ? 

The strategy is leaning towards increasing the number of subscriptions and direct revenue, by providing exclusive and beneficial features. This, for example, is a strategy used by Elon Musk with Twitter which he renamed as « X ». In 2021, he introduced Twitter Blue and included benefits such as Blue verification mark, edit tweet functionality and priority ranking in conversations. These new changes have not always gone down well with X users. 

YouTube has been offering their premium subscription for nearly 10 years now, giving benefits such as no ads and more flexibility to use the app on your device. However, in the last year, the platform has provided new features such as access to its own generative AI experiments. YouTube has its own in-stream AI chatbot, which is able to answer questions. 

Mark Zuckenberg has this year brought in a paid subscription model similar to X called Meta verified, a new subscription bundle that includes account verification with impersonation protections and access to increased visibility and support. This is for influencers to grow their community and popularity, while the platform itself has had to adapt it’s strategy in context with the ongoing events in the world.