Facebook to Take Cut of Fan Subscription Revenue in 2020
How much and when depends on the platform
The testing phase of fan subscriptions is over, and Facebook will start taking a cut of the revenue, starting in 2020, reports TechCrunch. In 2018, Facebook launched the fan subscription program to allow content creators to charge fans $4.99 a month to access exclusive content and get a fan badge. During the testing period, Facebook did not take any of the revenue. How much they will take and when depends on the platform.
On mobile, when platforms like Apple take their 30 percent fee, Facebook won’t take anything, but in the second year, when Apple’s cut drops to 15 percent, Facebook wants the other 15 percent. On desktop subscriptions, however, Facebook will get a 30 percent cut starting January 1, 2020. TechCrunch reports that these changes will only impact new subscribers.
TechCrunch broke this news in February when it obtained a terms of service document that showed Facebook could take up to 30% of subscription revenue, less fees. By comparison, the Patreon platform takes 5%, YouTube takes 30% and Amazon’s Twitch takes 50%.
Facebook also retains the right to offer discounted free trials periodically at their discretion, and they can reduce any revenue share proportionately: “Your revenue share will be reduced accordingly: we only pay you a revenue share based on the amounts fans actually pay (less fees and taxes we incur).”
As if that weren’t enough, Facebook reserves the right to terminate or suspend any Fan Subscription at any time in their sole subscription. They can also stop offering Fan Subscriptions at any time.
“In no event will we be liable in any way for terminating or suspending your use of Fan Subscriptions, for the discontinuation of Fan Subscriptions, for the removal of or disabling of access to content, or for the withdrawal of the content or Fan Subscriptions,” Facebook says in their Fan Subscriptions Creator Terms (item #12).
For their part of the agreement, creators must notify fans in advance if they change their Fan Subscriptions in a material way, giving fans the opportunity to cancel their subscription after their next subscription fee payment (item #13).
Facebook announced the subscription changes and others at VidCon this week, including:
Content creators can launch exclusive groups for subscribers.
- The social media platform will expand its Facebook Stars program.
- Creators can limit pre-roll and image ads and opt for “non-interruptive” ad formats instead.
- Creators can view their Instagram insights and data through the Facebook Creator Studio.
- The goal, says Kate Orseth, director of media monetization, is to provide a range of monetization tools that creators can use individually or in combination to produce the best revenue-generating opportunities.
According to Facebook’s FAQs for monetizing fan subscriptions, fan subscriptions are only available to certain pages in certain regions right now, so we do not know how many Fan Subscriptions and creators this will impact. Pages must be reviewed for eligibility and will be notified by Facebook within five to seven days after applying. However, Facebook does not specify what makes a page eligible. It does, however, provide a link to gaming creators on Facebook.
Facebook is not winning a lot of friends these days. Facebook users mistrust them, different governments are investigating them, and creators will soon be hit with revenue share agreements reminiscent of the so-called Apple tax. Yet on the Fan Subscription onboarding page, they make it sound like the best thing ever. For creators who do not yet have an audience, this could be a way for them to establish themselves – if Facebook will even approve them and assuming the service is available to them. For seasoned creators, they may be better served by another platform.
To be fair to Facebook (yes, I just said that), we will reserve our opinion until the Fan Subscriptions are available to all, or most, creators and see how those terms and conditions evolve over time. Perhaps Facebook will see that relax a little on the 30% revenue share as a good faith effort toward business building.
Orseth, director of media monetization, is to provide a range of monetization tools that creators can use individually or in combination to produce the best revenue-generating opportunities.