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The psychological impact of an $11 Facebook subscription

Would being asked to pay Facebook to remove ads make you appreciate their value or resent them even more? As Facebook considers offering an ad-free subscription option, there are deeper questions than how much money it could earn. Facebook has the opportunity to let us decide how we compensate it for social networking. But choice doesn’t always make people happy.
In February I explored the idea of how Facebook could disarm data privacy backlash and boost well-being by letting us pay a monthly subscription fee instead of selling our attention to advertisers. The big takeaways were:
Mark Zuckerberg insists that Facebook will remain free to everyone, including those who can’t afford a monthly fee, so subscriptions would be an opt-in alternative to ads rather than a replacement that forces everyone to pay
Partially decoupling the business model from maximizing your total time spent on Facebook could let it actually prioritize time well spent because it wouldn’t have to sacrifice ad revenue
The monthly subscription price would need to offset Facebook’s ad earnings. In the US & Canada Facebook earned $19.9 billion in 2017 from 239 million users. That means the average user there would have to pay $7 per month

How ad-free subscriptions could save Facebook

However, my analysis neglected some of the psychological fallout of telling people they only get to ditch ads if they can afford it, the loss of ubiquitous reach for advertisers, and the reality of which users would cough up the cash. Though on the other hand, I also neglected the epiphany a price tag could produce for users angry about targeted advertising.
What’s Best For Everyone
This conversation is relevant because Zuckerberg was asked twice by congress about Facebook potentially offering subscriptions. 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.”
But that word ‘today’ gave a glimmer of hope that we might be able to pay in the future.
Facebook CEO and founder Mark Zuckerberg testifies during a US House Committee on Energy and Commerce hearing about Facebook on Capitol Hill in Washington, DC, April 11, 2018. (Photo: SAUL LOEB/AFP/Getty Images)
What would we be paying for beyond removing ads, though?. Facebook already lets users concerned about their privacy opt out of some ad targeting, just not seeing ads as a whole. Zuckerberg’s stumping for free Internet services make it seem unlikely that Facebook would build valuable features and reserve them for subscribers
Spotify only lets paid users play any song they want on-demand, while ad-supported users are stuck on shuffle. LinkedIn only lets paid users message anyone they want and appear as a ‘featured applicant’ to hirers, while ad-supported users can only message their connections. Netflix only lets paid users…use it at all.
But Facebook views social networking as a human right, and would likely want to give all users any extra features it developed like News Feed filters to weed out politics or baby pics. Facebook also probably wouldn’t sell features that break privacy like how LinkedIn subscribers can see who visited their profiles. In fact, I wouldn’t bet on Facebook offering any significant premium-only features beyond removing ads. That could make it a tough sell.
Meanwhile, advertisers trying to reach every member of a demographic might not want a way for people to pay to opt-out of ads. If they’re trying to promote a new movie, a restaurant chain, or an election campaign, they’d want as strong of penetration amongst their target audience as they can get. A subscription model punches holes in the ubiquity of Facebook ads that drive businesses to the app.
Resentment Vs Appreciation
But the biggest issue is that Facebook is just really good at monetizing with ads. For never charging users, it earns a ton of money. $40 billion in 2017. Convincing people to pay more with their wallets than their eyeballs may be difficult. And the ones who want to pay are probably worth much more than the average.

Let’s look at the US & Canada market where Facebook earns the most per user because they’re wealthier and have more disposable income than people in other parts of the world, and therefore command higher ad rates. On average US and Canada users earn Facebook $7 per month from ads. But those willing and able to pay are probably richer than the average user, so luxury businesses pay more to advertise to them, and probably spend more time browsing Facebook than the average user, so they see more of those ads.
Brace for sticker shock, because for Facebook to offset the ad revenue of these rich hardcore users, it might have to charge more like $11 to $14 per month.
With no bonus features, that price for something they can get for free could seem way too high. Many who could afford it still wouldn’t justify it, regardless of how much time they spend on Facebook compared to other media subscriptions they shell out for. Those who truly can’t afford it might suddenly feel more resentment towards the Facebook ads they’ve been scrolling past unperturbed for years. Each one would be a reminder that they don’t have the cash to escape Facebook’s data mines.

But perhaps it’s just as likely that people would feel the exact opposite — that having to see those ads really isn’t so bad when faced with the alternative of a steep subscription price.
People often don’t see worth in what they get for free. Being confronted with a price tag could make them more cognizant of the value exchange they’re voluntarily entering. Social networking costs money to operate, and they have to pay somehow. Seeing ads keeps Facebook’s lights on, its labs full of future products, and its investors happy.
That’s why it might not matter if Facebook can only get 4 percent, or 1 percent, or 0.1 percent of users to pay. It could be worth it for Facebook to build out a subscription option to empower users with a sense of choice and provide perspective on the value they already receive for free.
For more big news about Facebook, check out our recent coverage:

Facebook shouldn’t block you from finding friends on competitors

Zuckerberg’s boring testimony is a big win for Facebook

Highlights and audio from Zuckerberg’s emotional Q&A on scandals

The psychological impact of an $11 Facebook subscription

Apple Finally Gives Proper Credit To OpenStreetMap In iPhoto For iOS

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When Apple launched iPhoto for iPhone, it quickly became clear that there was something odd going on with the maps in the application. Even though Apple never talked about this publicly, the data Apple used to render these new maps was clearly not from Google anymore. Instead, most experts agreed, Apple was using a number of different sources to create its new map tiles without giving proper credit to groups like OpenStreetMap, the Wikipedia-like crowdsourced mapping organization. This week’s update to iPhoto for iPhone, however, finally gives credit where credit is due.

iPhoto for iPhone’s acknowledgments page now prominently features OpenStreetMap, as well as other free and commercial sources including Urban Mapping, GeoNames, LeadDog, the U.S. government’s TIGER/Line and Canada’s StatCan.

OpenStreetMap Foundation’s Richard Fairhurst told TalkingPointsMemo’s Carl Franzen that he would have preferred if Apple had reached out the organization and credited it from the start, but, he said, “If the biggest computer company in the world, one with a perfectionist instinct, feels that OpenStreetMap data meets its needs and is happy to publicly attribute us, then that’s a great vote of confidence in our community’s work.”

The OpenStreetMap Foundation, Fairhurst told Franzen, “made informal contact with Apple,” but he credits one of the organization’s volunteers who is also an iOS developer for finally getting through to the company and getting it to credit OpenStreetMap.

While Apple is using a number of different sources for its maps, it’s worth noting that a number of other developers made the switch to OpenStreetMap over the last few month. Foursquare, for example, now uses OpenStreetMap data and Wikipedia, too, has made the switch in its iOS and Android apps.


Apple Finally Gives Proper Credit To OpenStreetMap In iPhoto For iOS

The Fallen King: Apple Outships RIM In Canada For The First Time

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Once upon a time RIM was the shining star of Canada. Hailing from the Great White North, BlackBerry phones were the country’s dominant smartphone. But times have changed and RIM has not changed with them. That’s a recipe for failure and it seems that based on data compiled by IDC and Bloomberg, Apple shipped more phones in Canada last year than RIM.

Waterloo, Ontario-based RIM shipped just 2.08 million BlackBerry smartphones last year in Canada, where Apple shipped 2.85 million units. This changing of the guard is a long time coming. As Bloomberg notes, in 2010 RIM bested Apple by half a million units and outsold Apple five to one in 2008.

RIM is seeing sales declines worldwide. BlackBerrys are still popular in the Middle East and Indian markets but Android, led mostly by Samsung phones, is quickly becoming the dominant player. Canada, where the company is based, was one of RIM’s last strongholds.

Canadian sales dropped 23 percent in the third quarter. Even though RIM introduced seven new handsets in 2011, Canadian consumers turned their backs on their hometown team. Now, in 2012, with a new CEO in place, the company is betting that its QNX-powered BlackBerry 10 handsets will stop the bleeding.

RIM’s glory days are behind it. Sheer arrogance led the company down its current path of misery. All is not necessarily lost, however. As long as RIM can produce BB 10 handsets on schedule, it might still be able to save the lucrative enterprise market from defecting to iOS or Android. But “on schedule” is not a phrase associated with RIM lately.


The Fallen King: Apple Outships RIM In Canada For The First Time

Coming Off Big Holiday Season, Sincerely Ink’s Mobile Postcards Now Ready For Valentine’s Day

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Sincerely, the maker of mobile apps that let you send your photos as print postcards, is pushing out a new version of its Sincerely Ink app today. The main change is that the theme now features Valentine’s Day cards, as well as other themes like Birthdays or New Year’s. Not huge news in and of itself, but get ready for many more updates like this — the Christmas season went so well for the company that it’s doubling down on holiday editions

Its largest mobile app, Postagram (a regular top app in the iTunes photo app category) saw 39% of its users also install and send a card using the Sincerely Ink app, founder Matt Brezina tells me. Postagram also lets you mail high-quality print versions of phone photos, and it could theoretically also be used during the holidays. So, the cross-promotion number means that lots of users are serious about themed cards for special occasions, and that Sincerely’s theme changes are hitting home with them.

The Ink app includes 20 Valentine’s Day-themed cards, although there are also new Thank You and Birthday cards available now. Brezina says they’re adding more designs all the time without the app itself needing to be updated. Customization options include photo filters and a section for including a personalized message. Cards cost $1.99 for a glossy 5×7 inch photo print, including postage in the US, Canada and the UK. Photos ship within 3 to 7 days. In other parts of the world, the price goes up by a dollar, and mailing can take up to a few weeks. The app is available for iOS and Android devices. The first 100 TechCrunch readers can follow this link, enter “vdaytc” and send a free card.


Coming Off Big Holiday Season, Sincerely Ink’s Mobile Postcards Now Ready For Valentine’s Day

Forget BBX: RIM Faces Legal Woes Over BBM Trademark

sadberrys

I swear, it never ends — not long after a U.S. court passed down a judgment that saw RIM change the name of their new operating system, the company has once again gotten themselves into a tiff over trademarks. This time, the name in question is “BBM,” RIM’s preferred shorthand for their popular BlackBerry Messenger service.

The lawsuit comes courtesy of BBM Canada, a not-for-profit broadcast and audience measurement organization that’s been in business considerably longer than RIM has. Originally known as the Bureau of Broadcast Measurement, the group was originally founded in 1944 and took on the BBM moniker in 2001 — well before RIM’s BlackBerry Messenger service came to be.

RIM has gotten quite a bit of mileage out of BBM, and went on an advertising spree a while back in order to drum up some public interest for it. While using the BBM mark is totally admissible here in the States, the company filed for and was denied a trademark for BBM in their native Canada.

“We want our name back,” said BBM Canada CEO Jim MacLeod. “I find it kind of amazing that this wouldn’t have been thought about before they decided to use the name. The same thing goes for BBX.”

MacLeod seems strangely apologetic about the whole thing — he has made efforts to accomodate the much larger company, even going so far as offering to rebrand the group entirely in order to avoid making a scene. Those overtures were met with silence from RIM, which has led to the sticky situation these companies are embroiled in.

RIM hasn’t yet responded to these allegations, but when they do, I imagine that they’ll say there’s no conflict since both companies operate in different fields. Then again, since they tried that line during the BBX case to no avail, RIM’s legal team may need to work out a different approach. If this sort of thing keeps up, the company runs the risk of looking, well, incompetent. And really, the last thing RIM needs now is for their top brass to look foolish, lest their stock price take (another) dive.


Forget BBX: RIM Faces Legal Woes Over BBM Trademark