The free era of the Internet is over.

Once upon a time, the model where users used Internet products for free in exchange for watching "ads" has finally come to an end in the AI era.

On May 27th, Meta officially announced the launch of a paid subscription plan globally. Instagram Plus is priced at $3.99 per month, Facebook Plus at $3.99 per month, and WhatsApp Plus at $2.99 per month.

Meanwhile, Meta is also testing an advanced AI plan (with two tiers of $7.99 and $19.99) for heavy AI users and a professional package ($49.99) for creators, all promoted under the "Meta One" brand.

This is not just a simple product update, but a crucial move in Meta's larger strategic transformation. Behind this, it may represent the end of the "free Internet era" that we used to be familiar with.

01

The Landlord's Family Is Also Running Out of Grain

To understand the significance of today's subscription plan, we need to rewind the time to a month ago.

On May 20th, Meta initiated a major lay - off that shook Silicon Valley. Approximately 8,000 employees were laid off, and 6,000 open positions were frozen. At the same time, the company announced that it would invest between $125 billion and $145 billion in AI infrastructure. The lay - offs are to concentrate funds on AI.

Meta's CTO then clearly stated on May 25th that AI tools would be used to carry out a "large - scale transformation" of the workforce. 7,000 employees were transferred to AI - related positions. The focus of the entire company is tilting towards AI at a visible pace.

This brings up a core contradiction: How can Meta convince investors to pour so much money into AI?

For Wall Street, the most headache - inducing problem is not how much money Meta spends, but what kind of predictable returns these funds can bring. Google has the cloud, Microsoft has Azure, and Amazon has AWS - their AI investments can be measured by subscriptions and API calls. But what does Meta rely on?

Advertising revenue fluctuates with the market and is not stable; the open - source large - scale model Llama has enhanced the technical reputation, but it doesn't directly generate profits; AI glasses and AR devices are still in the early stages.

Subscription has thus come into Meta's sight.

This timing is not accidental.

02

How to Convince Users to "Pay"?

Meta's products have always had an implicit contract - you use my platform, and I sell ads with your attention. This logic has worked well for the past twenty years. Facebook has over 3 billion monthly active users, Instagram has over 2 billion, and WhatsApp users are spread all over the world.

However, holes have started to appear in this wall.

European regulators have always been the biggest driving force. To comply with the EU's data privacy regulations, Meta tested the "ad - free subscription" option in Europe as early as 2023, giving users a paid choice to avoid data tracking. The global subscription plan launched this time is, to some extent, an extension and deepening of this European experiment.

However, this time, Meta is playing a different logic - it's not "pay to avoid ads", but "pay to unlock more".

The core selling points of Instagram Plus include anonymous browsing of Stories, detailed replay data analysis, extended disappearing post duration, as well as custom themes and reactions. WhatsApp Plus focuses on privacy enhancement and function expansion.

The common feature of these functions is that the free version is already sufficient, but the paid version allows you to: "have a little more sense of control".

From a product design perspective, this is more difficult than "paying to remove ads". Removing ads addresses a clear pain point for users with a clear functional value; but "unlocking more" requires Meta to prove that these "more" features are really worth the price.

Research data from Forrester poured cold water: 70% of the surveyed users said they "definitely" or "possibly" would not pay for Meta's subscription. The reasons are diverse - some think the current free version is already enough, some have long - standing grievances about Meta's privacy practices, and some simply say "why should I give you more money".

This resistance is real, but it's not an incurable disease.

Snapchat+ is the best reference. When Snap launched its paid subscription in 2022, the outside world was generally not optimistic, thinking that users would not pay for a chat app. But as of now, Snapchat+'s paid users have exceeded 15 million. The key is not "whether users are willing to pay", but whether the value provided by the product is specific and direct enough.

X (formerly Twitter), Telegram, and Snap are all increasing their bets on subscriptions. Paid subscriptions are becoming an increasingly important part of the revenue portfolio of social platforms.

03

AI Features: The Real Monetization Battlefield

If Instagram Plus and WhatsApp Plus are just trials, then AI subscriptions are Meta's core ambition in this layout.

Meta announced that it will test two tiers of AI subscription plans, $7.99 and $19.99, with the main difference being the usage volume of advanced reasoning and "thinking mode". The basic version of Meta AI will remain free, but to get faster response speed, stronger reasoning ability, and a higher usage limit, you need to pay to unlock.

This design logic is almost identical to the freemium models of OpenAI and Anthropic.

The difference lies in scale.

OpenAI has a user base in the hundreds of millions, while Meta has billions of monthly active users. Even with a conversion rate of only 1%, the numbers will be very different. An analyst from Seeking Alpha did the math: Based on the $2.99 pricing of WhatsApp Plus and a 1.5% conversion rate, this single product alone could generate about $2 billion in annual revenue, with a gross profit margin close to 100%.

What excites investors more is the certainty of this type of revenue. Advertising revenue fluctuates with the macro - economy and privacy regulations, but subscription revenue is predictable recurring revenue. This is exactly what Meta couldn't clearly explain in its AI investment in the past - now, it has a story to tell investors.

On the day the news was released, Meta's stock price rose nearly 3%. The market's reaction was straightforward and clear. Mark Mahaney, an analyst at Evercore ISI, gave a buy rating. He is particularly optimistic about WhatsApp's long - term monetization potential, predicting that by 2030, WhatsApp alone could generate $40 billion in annual revenue.

Of course, this is the most optimistic scenario prediction, and the real - world path is full of uncertainties. But it at least shows that this path is not a fantasy, but a business logic supported by numbers.

04

The "Free Era" Is Over

Remember the well - known saying in the tech circle - "When the product is free, you are the product."

Meta's business model has always been the most typical example of this saying. Users exchange their attention and data for free services, and Meta sells this data to advertisers. This logic has worked extremely well in the smartphone era. The rise of Facebook, the explosion of Instagram, and the global expansion of WhatsApp are all based on this.

However, the definition of "free" is quietly changing.

On the one hand, the awakening of privacy awareness has made more and more users vigilant about the "data - for - service" exchange. The EU's GDPR and DMA regulations are tightening step by step, and Meta pays billions of dollars in regulatory costs every year. On the other hand, the competition in the AI era has made the cost of "free" unprecedentedly high - training an advanced model and maintaining the computing power of an AI assistant are much more expensive than displaying a few ads.

Zuckerberg needs a way to make users who get real value from Meta AI pay directly for that value.

This is not a betrayal of the original intention of the "free Internet", but an acknowledgement of a reality - in the AI era, "free" requires someone to pay the bill elsewhere.

The payer can be the advertiser or the user themselves. Meta now wants both to co - exist.

The success or failure of the subscription plan ultimately depends on the answer to a question: Are features like anonymous browsing of Stories, advanced AI reasoning, and creator data analysis really worth a few dollars from you every month?

Twenty years ago, when Zuckerberg typed the first line of code in his Harvard dorm, he probably didn't expect that one day he would charge users.

But that was a story twenty years ago.

This article is from the WeChat official account "GeekPark" (ID: geekpark). Author: Hualin Wuwang, Editor: Jingyu. Republished by 36Kr with permission.