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Twitter Co-Founder Biz Stone To Facebook: Start a Premium Subscription Service
An anonymous reader writes "Twitter co-founder Biz Stone today decided to offer some business advice for Facebook: launch a premium subscription service. For $10 a month, Stone figures the company could get rid of ads on its site for those willing to pay to go 'premium.' He says in part: ' Anywhoo, now that I’m using it and thinking about it, I’ve got an idea for Facebook. They could offer Facebook Premium. For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too. If 10% percent of Facebook signed up, that’s $1B a month in revenue. Not too shabby. It’s a different type of company, but by way of validation, have a look at Pandora’s 1Q14 financial results. Of all Pandora’s revenue generators, the highest growth year-over-year by far (114% growth rate) is in subscriptions—people paying a monthly fee for an ad-free experience....."
10% ???? It would probably be more like 0.001%.
... they'd still track and sell your data anyway, so what exactly is the point?
So his grand advice of making $1B/month (LOL!) is to disable ads?
If you were so addicted to Facebook that the ads really annoyed you, wouldn't you have Facebook enhancing crap installed, like Adblock+? Social Fixer is pretty great, but I'm not quite addicted enough to use it.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
The Pandora ads are obtrusive. Facebook ads are the same as web ads everywhere, easily ignored.
Anywhoo, now that I’m using it and thinking about it, I’ve got an idea for Facebook. They could offer Facebook Premium. For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too. If 10% percent of Facebook signed up, that’s $1B a month in revenue. Not too shabby.
The problem is highlighted in bold. People who love Facebook and are willing to pay $10 a month isn't 10% of Facebook's user base, it probably isn't even 1%. I think hardly anyone really "loves Facebook" at all actually, the only reason people stick around is because that's where their friends are.
Facebook really needs to improve their platform *a lot* if they want to charge people money for it, because in it's current state, it isn't worth a dime.
Pretty good is actually pretty bad.
perhaps it will deal the killing blow to facebook.
From the least to the greatest, all are greedy for gain; prophets and priests alike, all practice deceit.
I have better advice for Facebook, Google, Hulu and all other interactive media. Why don't you ask me what kind of ads/informertials I want to see? Stop trying to figure out what I may want and stop showing me crapy ads for insurance (I have one), laundry detergents (who cares) or senior mobility devices (still have couple decades to get there). Ask me what ads I would like to see (cars, computers, movies, music, etc.) and then make those ads not only entertaining but also educational/meaningful. I would be happy to see few of these before or after my movie or while I am browsing.
when they offer a paid service to see who has actually visited your home page. Classmates.com is (and always has been) failing for this very reason. LinkedIn has joined them.
Sorry, people, but if you have that information, either keep it to yourself, OR it should be my legal right to know who is e-stalking me. I shouldn't have to pay to know that.
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
Twitter co-founders advice to facebook is to decimate their user base and drive users to twitter.
In other news, Microsoft's advice to Apple is to bring back the Newton and the Pippin. Yahoo advises Google to remake their search engine to be more like Ask Jeeves. Jay Z advises Diddy to release a bluegrass record. Pepsi advises Coke to start peeing in the vats. AND SO ON
There is a huge difference between Pandora's ads and Facebook's ads. Even without adblock its easy to ignore Facebook's ads, not so much when your music is interrupted with an ad on Pandora. The reason why Facebook has been mass adopted has been:
1) Everyone is on it
2) Its free
3) Its not Myspace
I don't think there's a single person who would say that Facebook is great or amazing, instead its simply adequate enough for most people's needs. Other than simply having a lot more people on it than other social media sites, there is no advantage to Facebook when compared to literally any other social media site, it has no competitive advantage other than merely being the most popular. Pandora is different, its predictions are much more accurate than Apple Genius or Last.FM, its superior to its competitors, not merely the most used and until someone makes better predictions, it will continue to be used.
Facebook needs to make their platform better if they expect people to pay for it because all they have going for them now is sheer numbers, just like Friendster and Myspace had going for them in their heyday...
Taxation is legalized theft, no more, no less.
Coming from a guy who's company's income is roughly 1/3rd of FB's advertising income. http://articles.latimes.com/2013/mar/27/business/la-fi-mo-twitter-ad-revenue-billion-2014-20130327
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I thought Facebook was already premium. In order to skip the friend request CAPTCHA, post videos, add a page, or even to log in to your account after a while, you have to verify your account, which requires having a unique mobile phone number. A house phone won't work if you share this phone with another Facebook user in your household, and a lot of house phone carriers can't receive texts anyway.
for Facebook is IF not only would the experience be AD free, but I would have 100% control and ownership of the material that I posted. If I decide to delete/remove something, it would be 100% gone, not archived anywhere. If I want to backup my posts, my entire account, I would be able to do so.
I can't help but wonder if he came up with this great idea all on his own or if he managed to read one the chain letter typed rumors about "Facebook Premium" that are posted and circulated on Facebook every week. I guess Stone is to blame for all the "Starting on (pick one of 50+ dates claimed) Facebook will no longer be free. Tell your friends." messages I have had to deal with in my timeline for the last several years.
I thought the products whose names start with iP were the return of the Newton, and the new gaming functionality that ships in iOS 7 was the return of the Pippin. So you might want to revise your analogy.
Biz Stone misses the point of Facebook completely. The ads are not there to finance a free subscription model, the subscriptions are there as targets for the ads.
And no way will Facebook change that. In fact, they started as a premium service with limited access, in order to build up a demographic base to have to sell.
"I know I will be modded down for this": where's the option '-1, Asking for it'?
"Biz?" Seriously?
I pay for Pandora purely so I can bypass their monthly limit. Just like Facebook ads, Pandora ads are simple to ignore.
So, then what happens is that people pay to not have ads. Then pretty soon, they will have ads on the premium service as well. Then people will get pissed and leave.
If you are not allowed to question your government then the government has answered your question.
Why is it that the current model in large scale endeavors like this is to purposely make something so annoying that the customer would pay to remove that annoyance? Why spend all that money on a clean and simple, easy-to-use interface to attract customers - and then purposely make it annoying? It seems like we go through cycles - a great product appears, it attracts a massive userbase, marketing steps in and fraks it up, users jump-ship to the "next great thing", repeat. I realize that these are businesses which need to make money, but seriously, is general marketing really that stupid? How many years now have we been driving this failed model?
People want to pay 10 bucks a month for Facebook? Funny, I'm trying to get off it...
The ads aren't the problem. No one minds the ads. In fact, if they had any skills, they would make the ads a FEATURE of the site. People actually BUY magazines like Vogue FOR the ads.
The problem is that the content is crap - photos of your friends throwing up, political rants no one cares about, etc..
Subscription services generally offer professional content worth buying. No one wants to buy photos of your friends throwing up.
Facebook tries to filter the content automatically to limit low-value content, but that only gets rid of the bottom-of-the-barrel. They still aren't going to offer professional articles, movies, music, etc.. that people generally pay for.
Their layout sucks too. The web has moved far beyond their old-school layout into magazine-quality layout. Amateur's aren't going to be able to produce magazine quality layout as well.
Facebook has 1 billion users, and ONLY makes $4billion/year. Conde-Nast makes $4billion just from 10 million readers - 1/100th less. Their amateur content is the reason they can only charge $0.10 CPM, whereas a professional media company can charge $50 CPM.
I pay subscription fees for two websites. One is a forum that costs me around $3 a month (I pay a year in advance.) The other is di.fm which is $5 a month for ad-free. Since the ads are auditory and cannot be ignored, the $5 a month for me is very much worth it to improve the music listening experience. The forum gives me an avatar, no ads, and many other perks for paying them - plus I spend enough time on there to justify it.
I'd pay at most a dollar a month just to get rid of ads on Facebook - if AdBlock didn't already do that for me. Now, give me a feature to block any and all invitations to Facebook game aps and we might have a healthy conversation about it.
Occasionally living proof of the Ballmer peak.
I mean, is the goal:
1. to get the site sold
2. to take money from subscribers
3. are the users the product?
I figure it is #1. But who's gonna buy facebook?
The internet is a cesspool of spammy, useless ads, and sex ads. Nice try, Twitter, but I already have a pleasant viewing experience without having to fork out money to get rid of ads.
If anyone wishes to join me on this side, it's much greener: Go Here
The part about launching a premium service is something I'm sure Zuckerberg thinks about all the time (see: Amazon Prime), but not if they exclude the ads. That's telling their advertisers that they won't be reaching the very people they want to target the most.
$10 a month just so I don't get to see ads is not a deal. How about for $10 Facebook won't sell my personal information, browsing habits, and connections of everyone I associate with (and also their associations) to every "partner" they have. And while they're at it, perhaps gain some trust from their users by actually growing a backbone and keeping Big Brother out of Big Data.
$10 a month just for no ads is just a cash grab
.
"If it ain't broke, it doesn't have enough features yet"
Biz's suggestion is naive and unrealistic. There is a VERY big cliff between 0 and 1 penny. I've been a part of several major startups that have offered free services and tried to charge. Unless you are blocking access to very valuable information that the user wants or needs (ala linkedin), people just wont pay. The uptake on that for facebook would be more like .01%. If it is a such a great suggestion why doesn't twitter try this?
Do I get to opt-out of all the information gathering about me and the partnerships Facebook has with other's in the industry who want to track my buying habits, my social preferences and in general just want to look at me as a giant piece of data that can be mined?
Harrison's Postulate - "For every action there is an equal and opposite criticism"
I think more people would pay for a 'feature freeze' to permanently opt out of whatever half-baked change to the UI facebook was making that month.
It's hard to ignore ads on Pandora, since they interrupt your music. On Facebook, though, it's easy: just glance and move on, which is the same thing you do to 99% of the stuff your friends post in your news feed anyway.
I would love for Facebook to do this - anything that further opens the door for a competitor to swoop in and steal Facebook's thunder is a good thing.
And lest anyone think that's impossible, please do try to remember Facebook's own origin story. Myspace was _THE_ social networking website but everyone hated it. People used it because people used it but nobody liked it. Then Facebook came along with a clean, simple site that allowed people to do what they wanted most - stay in touch with their friends and family. Almost overnight, Myspace was dead and Facebook was beginning a meteoric rise.
Now, if you don't think it's possible for that to happen again, then you're not paying attention to the history of the internet nor the history of social networking sites of which Facebook is a player. People use Facebook because people use Facebook. Create enough scenarios that stop people from using Facebook or, more importantly, to start using something else and guess what happens...
So, please Facebook, go the freemium route and push users towards a $10/month fee. Please do it. It'll be wonderful for your balance sheet for a short while and you'll make a fortune. And you'll open the door for a competitor who is willing to offer users what they want because, increasingly, Facebook is less and less what people want any more.
You are free not to use Facebook if you don't like their security policy (indeed, there are many similar reasons not to use Facebook). It is hardly "reprehensible". If the government required you to have a mobile phone to live in this country, that would be reprehensible.
The government requires people to find a job in order to live outside prison. If all employers in the field for which one is trained require a mobile phone, then the government requires a mobile phone.
Did he really say "anywhoo"? Just ignore anything after that, it won't be worth hearing.
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
sensible service that uses the email address known from account creation.
Facebook is relying on the telephone number as a unique key to identify real people. Anybody can generate trillions of e-mail addresses by registering a domain and using catch-all forwarding. It's supposed to be cost-prohibitive to register a phone number just to create a single Facebook account.
Anyway, FB is a lek. Its main attraction is it is the main attraction for a significant percentage of others. All it takes is for a significant fraction of the FB users to skip FB, its status will decline exponentially. Microsoft Windows+ Office was a lek. Everyone used it because everyone else used it. At some point the negatives out weighed the positive, and it declined quite rapidly and seems to be struggling to find its footing.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I usually log in to FB with the made-up name of "George Zimmerman" to avoid tracking, but for some reason I've been getting a lot of hate lately . . .
I don't think Zuck will change it like this? Facebook is free and always will.* *Conditions Apply
WTF? The problem with Facebook isn't the ads, it is the strategy by which they serve them up to you by raping your privacy. I already pay $15/mo for a Facebook-like service that has privacy and security as key features. Facebook would never do that because there is so much money to be made by raping privacy. Until one day there isn't. Better hope the sheep keep munching grass.
Facebook's traffic, user count, revenue, and profits peaked in mid-2012. They're already on the Myspace track to decline.
The future of "social" is on phones, not the Web.
I don't really have a problem with seeing ads but I'd pay something to not have ads on my content which others see.
10 dollars a month is a lot though and a lot more than it's really worth. pandora is 40 a year and they actually provide content, and don't get the content for free like Facebook does.
10$ a month to have total anonymity to the government. pay 10$ a month and the government cant access your facebook... EVERYONE would buy that
They want facebook users who have a little disposible inome that they might intice to buy something. Users without much money are less likely to buy on-line and won't be able to afford $10/month. Users who can afford $10/month are the very ones who the advertsiers want.
So: if facebook were to do this they would hurt their advertisers who would see less reason to advertise with facebook. Ie this would be a total fail for facebook.
I use Facebook still which is of great annoyance to me. I have grown to hate Facebook in recent years. For instance, when I say I'm going somewhere and stop at a coffee shop in between, Facebook picks right there and then to tell my whole friends list I'm stopped at a coffee shop because apparently in my stupidity or whatever you would like to choose to say about me, I have not turned location off and have not adjusted my privacy settings. So then I have five people texting me saying: "I thought you were on your way.." "Why did you lie?"
Holy Kentucky fried shit....I'm at a goddamn drive through!!!!!
In this situation it suddenly occoured to me that I had volunteered my personal information to a large corperation who profits from the use of it. It also occoured to me that this thing tells people exactly where I am everytime I don't adjust the settings. Preventable? Yes. But why should I have to put any effort into preventing my location being broadcasted and attached to the things I post. So I have everything that has anything to do with sharing my information turned off, which may make no difference in my privacy in terms of the global availability of my information but no more being called a liar every time I run through Dutch brothers. And I will certainly never pay for it. So the advertising is removed. WOW, how magnanimous of you.
For $3.99 a month, Facebook would allow you to see who is looking at your profile. You could also control how you display when looking at other people's profiles (name, area, or anon). LinkedIn is doing this and I think it's a great service.
for example Scientific American and Discover Magazine. I want to see their web sites without ads, not someone's idea of what an electronic magazine should look like, especially when it downloads slowly and uses unfamiliar navigation.
Firefox on your favorite OS whether it be windows, linux, etcetera, adblock plus, noscript, ghostery, and social fixer (for facebook) extensions and you've effectivly killed off all the annoying ads, "suggested/recommended" posts from advertisers, and all the wonderful tracking garbage. And best of all it's free. I could only see $10 being for the computer ludites who barely know how to turn on a computer and load up a browser and are able to go to facebook and whom are too stupid to learn how to remove ads from facebook for free and actually make it a bit more tolerable.
Aren't those the same people who buy Apple stuff?
peerblock etc. etc.
Facebook doesn't make any money off that.
It makes money selling peace of mind to advertisers that 1. each account represents a unique cell phone subscriber, and 2. users are rich enough to afford a personal cell phone. And I don't know whether Facebook owns a position in one of the major carriers or vice versa, but if so, it'd make money when more people sign up for a cell phone.
Likewise, Facebook requires that you have a computer with an internet connection.
Facebook requires users to have access to a computer with an Internet connection, but it requires each user to have exclusive access to a mobile phone. One of several members of a household who share a POTS line, PC, and Internet connection has access to a PC but no unique mobile phone number. This is especially true in areas where the only wired broadband ISP includes a POTS line at no extra charge to DSL customers, like where my mother lives. Likewise, someone who accesses the Internet at work on break or at a public library has access to a PC but not necessarily a unique mobile phone number.
If you want to use a website, you have to buy internet.
Anyone who pays taxes is already buying Internet at a public library. Facebook requires an additional service.
"Anywhoo?"
"10%!"
Now we know:
what he likely contributed to Twitter (nothing),
why he's gone from Twitter (good-for-nothing insights like this one), and
what his new mysterious company will likely deliver (nothing).
oh yeah that's right, then your simple insert form website wouldn't work anymore..
it wouldn't work without the huge CIA money behind it, but like facebook it does.
... to eliminate annoying ads from their Facebook pages, news feeds. etc. and replace them with "special features" that are highly likely to be even more annoying than the ads you used to get?
CUR ALLOC 20195.....5804M
We pay a few bucks a month to pandora to stop the ads. We do NOT have a lot of money.. but the decision went something like this: We started playing music on pandora while rocking our child to sleep. When an ad came on... it would wake her up. UGH... so we just paid to get the ads to stop.
Now we just do it because pandora is really great, we love it and the price tag is tiny.
Hmmm... This topic is very interesting one. Yes, maybe those people who can pay $10 per month and can actually have these ad-free Facebook account. But, in reality; ads sometimes could help one person find some thoughtful information. It is only then be a thoughtful information if the ads he/she have seen on the Facebook Environment is the information he/she really wanted. Nevertheless, people do also disregard that ads showing on their accounts. http://slashdot.org/submission/2799897/epiphanie-bags
The whole ad driven model for this stuff has to fall over someday. You get a service, you pay for it. Simples.
I would agree with him...but I would set the price at €2 a month. If you set it down in the price of pocket change, then lots more people would pay? Maybe tie it to sending 1 premium price text a month, comes out of your mobile phone plan nice and painless. I would support that.
Also, how much does each user bring in in ad revenue? not much I would say. But I dont have facts. Personally I have never clicked on a facebook ad.
There are ads on Facebook? Oh right, I use ad-blocking software.
-- sudon't
Air-ride Equipped
Fuck Facebook.
On Pandora, the ads get in your way. You literally have to listen to them between so many songs(like every 3 or 4 or something like that). On Facebook, they're unsightly and they're off to the side and you can get rid of them with ad block.
I'm totally willing to pay under $3 a month for Pandora. It's worked out well for me. $10 on Facebook is ludicrous.
...company; however, great advice for a private company.
Suddenly the majority of your revenue base is entirely dependent upon subscriptions. That works great for a few quarters (really great actually), and if Wall Street wasn't a ridiculous place where people could care less if you posted 1B in revenue two quarters in a row - they only care about growth irrespective of how healthy or profitable your business is - it could work.
Sadly, that's not how publicly traded companies are evaluated. Finding new revenue generation mechanisms that do not preclude the pre-existing mechanisms is pretty much Facebook's only way forward.
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So many people who are addicted to FB, and are willing to pay money for it, frequently use it from their phones. If ads on phones are intrusive enough, cause page rendering to be slow, and eat bandwidth, then those people would probably be willing to pay, to avoid them.
I know how to make Face Book dirt cheap and free of ads. Get rid of the expensive backend which is only there for the benefit of advertizers, distribute it regionally with outler access, and make the friends's list the only global thing. Face Book as the global entity would be much cheaper to run and the small regional CMS much less in need of costly support. To punish free users of the current model with ads that you have to pay not to see is just another businessman scam. If the model is to reduce the cost of running a social media service, then do away with the global CMS.
The global CMS is why the UI for Face Book is so crappy and inflexible. The impetus for its design is not ease of use by users but access from FB's investors to the "privacy", not, of users. Do away with the problem by running the whole thing more cheaply and by doing away with the investors, or the need for expensive investors. Face Book doesn't need to be as capitalized as it is, another business scam. It isn't as local as a blog, even though most blogs have a better UI now, and you and I don't care that its backend can support more than 1 billion users when you and I only care about a few hundred at most and only three or four at a time. Do away with it, it is unnecessary. Shortly its investors will figure this all out and leave. Then it can be done at a better scale and for cheap. No need for a Premium service.