🎙️ Meta's Gambit

One way to resolve business conflict? Team up 🤝

That’s precisely what Peloton and Lululemon did last week, ending their feud with a partnership. Peloton, which tried to sell its own apparel, will now sell co-branded Lululemon apparel. And Lululemon will discontinue its Studio Mirror home fitness device.

💭 Time will tell whether the partnership can jolt Peloton from a lengthy sales slump. As for Lululemon? As you’ll see below, they’re doing just fine.

— Matthew, Shawn, and Weronika

Here’s today’s rundown:

Today, we'll discuss the three biggest stories in markets:

• B

• T

• Meta plans to add paid, ad-free tier

All this, and more, in just 5 minutes to read.

CHART OF THE DAY

Q & A

IN THE NEWS

🎤 Beyoncé Blamed for High Inflation in Sweden

W

Why it matters:

W

Read more

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🛻 Rivian’s Quest to Build the Ultimate Truck Burns Through Billions

T

Why it matters:

A

Read more

MORE HEADLINES

🏈 Taylor Swift propels NFL to record ratings

☕️ Starbucks scientists are developing a “climate-proof” coffee

🪧 Americans support strikes until they affect their daily lives

💪 The job market stayed strong through August, with more than 9.6 million job openings

🤑 Meta Plans To Charge $14 A Month For Ad-Free Instagram Or Facebook

How about another subscription service?

Would you consider spending about $14 a month for ad-free Instagram? Europeans might.

Meta is exploring ad-free subscriptions for its European Union (EU) users. The company proposes to regulators that European users might have the choice to opt for a paid subscription or consent to personalized advertisements.

• In September, Meta discussed the plan in sessions with privacy regulators in Ireland and digital competition authorities in Brussels.

What gives? Meta has informed regulators about its intention to launch a plan, “SNA” (Subscription No Ads), for European users in the upcoming months.

• The proposal would give users a choice: continue using Instagram and Facebook for free with personalized ads or opt for paid versions of the ad-free platforms.

Charging extra: Meta has proposed to regulators a plan to charge users about $10.50 per month for ad-free desktop access to Facebook or Instagram and around $6 for each additional linked account. Mobile access would cost about $14 per month, reflecting commissions from Apple’s and Google's app stores on in-app payments.

• Notably, Meta has counted 258 million monthly Facebook users and 257 million Instagram during the first half of this year in the EU.

Why it matters: Launching a subscription option for fundamental Meta services marks a big shift for Meta as it tries to diversify revenue away from advertisements.

CEO Mark Zuckerberg has emphasized that his primary platforms should stay free and ad-supported to remain accessible to individuals across all income brackets.

• “You don’t need thousands of dollars to connect with people who use our services,” Zuckerberg said at a 2018 conference.

Keeping a close eye: Investors might closely watch the financial outcomes of Meta's new fee model, especially considering the Meta stock’s sharp drop in 2022 and swift recovery in 2023. Shares are up about 146% year-to-date.

A guinea pig: Currently, the switch seems aimed at European consumers. U.S. users, particularly those mindful of privacy, may not see an option to subscribe to ad-free Instagram or Facebook anytime soon. But this could change if the new fee model proves to be successful.

• Meta has distinctly pitched its proposals to adhere to EU regulators' demands for obtaining consent before processing user data for precise ad targeting.

Mimicking others: Meta, advocating for its plan, has highlighted how certain companies, like Spotify, offer users an option between a free, ad-supported service and an ad-free subscription service.

• The proposed mobile pricing from Meta aligns with what YouTube charges for its ad-free premium service in Europe.

Read more

See you next time!

That's it for today on We Study Markets!

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