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tyrfing | 2 years ago

Facebook ARPU for Europe is $19.04 per quarter, or $6.33 per month. This is based on monthly active users and includes Messenger. If you adjust for that - someone paying for a subscription is likely to be much more active than an average monthly user - it's likely that 10 EUR is a loss. The big winners are Apple and Google getting their cut if it's an IAP.

The economics are even worse in US/Canada, where an MAU is worth $56.11 per quarter, or $18.70 per month.

(EURUSD is 1.06, near parity.)

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jsnell|2 years ago

I think there's also a major tax difference between subs and ads, working in the same direction.

They don't need to collect VAT on the revenue from the vast majority of ads (basically only ads bought by individuals, which can't be common). They would need to do it for the subscriptions, and the end-user pricing is with VAT included. That's going to be another 20-25% off.

It seems very plausible that they are making less profit from the subscribers than from the non-subscribers at these prices. The pricing might still be more than people are willing to pay, but it's not any kind of scam.

morkalork|2 years ago

Who are these people that make advertising so valuable? Everyone I know either doesn't click on FB ads, or if they did, they've got a story about how they got scammed by some fly-by-night drop shipper.

nitwit005|2 years ago

Evidently, your friends are clicking on those ads, as they are getting scammed. It's unlikely they just clicked on scams.

It's true that a lot of people essentially never click the ads, but it's also true that seemingly smart and educated people can be extremely dumb about these things.

AuthError|2 years ago

how do you think they make money? its more likely that you live in a bubble than people dont click ads if you look at their earnings

falqun|2 years ago

Ever heard the story of cambridge analytica and the 2016 election? Granted, its an extreme of the system, but there are quiet some actors willing to pay for such services.

goldinfra|2 years ago

That seems plausible but can you cite where these figures are from? Is this just a rough estimate from total numbers for the entire company of $REVENUE / $MAUS?