Facebook to Start Taking Cut of 'Fan Subscriptions' Starting in 2020

In a bid to compete with YouTube and Patreon, Facebook introduced a $4.99 per month 'fan subscription' option for video creators in 2018 and initially allowed creators to keep all of those revenues.
By Annie Gaus ,

Facebook (FB) - Get Report wants to lure content creators by offering more monetization options -- and soon, Facebook will earn revenue from those options, too. 

At Vidcon, an annual conference dedicated to video creators, Facebook said that it'll begin taking a cut from "fan subscriptions" -- a program that allows creators to charge fans $4.99 per month for access to exclusive content. Facebook first introduced the subscription program on a test basis in 2018 in bid to compete with Alphabet's YouTube  (GOOGL) - Get Report and Patreon as a potentially lucrative home for creators. 

Starting on January 1, 2020, Facebook will take a cut of up to 30% on fan subscriptions. For subscriptions processed on desktop after that date, Facebook will take 30% of subscription revenue. On mobile, Facebook will take a revenue share only when the platform fees levied by Google's and Apple (AAPL) - Get Report  amount to less than 30%, which typically takes place in the second year of a recurring mobile subscription. At that point, Facebook will charge the difference as a revenue share. (Normally mobile platform fees drops to 15% in that second year.) 

Facebook hasn't released any figures on how many creators participate in its subscription program as of today, but a spokesperson said in an email that "low thousands" of people are offering subscriptions, as opposed to opting for ad breaks, which are more mature and in use by tens of thousands of pages. 

Earlier this year, Facebook CEO Mark Zuckerberg announced that the company will embrace a more private future, with a greater focus on peer-to-peer messaging and closed groups rather than public-facing social content that presently make up the foundation of the social network. 

Facebook shares were up 1.6% on Tuesday and have risen 44% so far this year. 

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