According to BofA analyst Justin Post, the paid subscribers could help Meta generate as much as $1.7 billion in high-margin revenue in 2024.
The Bank of America Corporation (NYSE: BAC), of BofA, has stated that Meta Platforms Inc (NASDAQ: META) could reach as many as 12 million paid subscribers for Facebook and Instagram services by 2024. According to the research note released by BofA, paid subscriptions and benefits offered by Facebook and Instagram were created with the purpose of attracting influencers and content creators rather than regular users. As a result, this might “help them increase visibility and reach with a badge and potentially higher positioning in search and content results.”
BofA explained:
“Given a broader audience reach and bigger revenue opportunity for creators, we believe Meta could outperform the subscriber ramp (as a percent of users) of peer subscription offerings (the service will likely be refined and improved over time).”
According to BofA analyst Justin Post, the paid subscribers could help Meta generate as much as $1.7 billion in high-margin revenue in 2024.
Justin Post commented:
“Given a broader audience reach and bigger revenue opportunity for creators, we believe Meta could outperform the subscriber ramp (as a percent of users) of peer subscription offerings (the service will likely be refined and improved over time). However, we note some potential audience size limitations above.”
The research follows Meta’s launch of a new paid subscription service called Meta Verified. The service aims to improve security and authenticity across Meta products by enabling users to verify their account with a government ID, get a blue badge, receive extra impersonation protection against accounts claiming to be someone else, and get direct access to customer support. The first countries to get access to Meta Verivied will be Australia and New Zealand. The subscription starts at $11.99 per month on the web and costs $14.99 per month on iOS.
The service is similar to Twitter Blue, paid monthly subscription that Twitter Inc brought back in December 2022. The service adds a blue checkmark to a user’s account and offers early access to select new features, like Edit Tweet. Since the launch of Twitter Blue, roughly 300,000 subscribers agreed to pay for the transition as of the middle of January.
Justin Post believes that Meta’s offering follows the demand for similar service as the top requests from creators on Meta-owned platforms were related to broader access to verification and account support.
“We are intrigued by this offering, which follows Twitter Blue and likely reflects demand for more services by Facebook’s creators. However, audience size could be limited by the number of creators and influencers on Meta’s platforms (Linktree estimates that there are over 45mn Global content creators with over 10k+ followers), and Meta’s release suggests that those already verified can keep their status, ” stated the post.
Following the announcement, Meta stock was up. Its shares have been on the rise since the company reported its fourth-quarter financial results, and analysts believe the new service might further boost the Meta stock price. Currently, Meta shares are trading at $172.08, but the average price target offered by Wall Street analysts is $215.20.
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