Facebook has found a new revenue model: beginning on January 1, 2020, the company will take a cut of up to 30% on fan subscriptions.
For Facebook, revenue has become a concern. Not that the company is not making any money, far from it. But with its ad inventory close to full capacity, Facebook has been seeking new ways to make money.
Launched in early 2018, fan subscriptions have allowed creators to charge their followers $4.99 per month to access exclusive content and earn a special fan badge. Until now, Facebook had not kept any of the subscription revenue, allowing creators to take everything.
However, reports confirmed by TechCrunch show that Facebook is now planning to take a cut, up to 30%, of subscription revenue. This is to be compared to a 5% subscription fee collected by Patreon, a 30% fee collected by YouTube and a 50% fee collected by Twitch.
Kate Orseth, Director of Media Monetization, explained that Facebook is committed to allowing creators to keep 70% of subscription revenue. So when the mobile platforms collect their 30% fee on first-year subscriptions, Facebook won’t take a cut. Then, as the platforms lower their share to 15% in the second year, Facebook will take the other 15%. On desktop, Facebook will be able to collect the full 30% from day 1.
Facebook also confirmed that it will only collect its 30% share from new subscribers starting January, and not from subscribers who would have signed up before then.