Meta Platforms (NASDAQ:META) is planning to launch a paid subscription model for ad-free viewing of Instagram and Facebook apps in Europe. The step is aimed at circumventing the European Union’s (EU) pressure to adopt stricter privacy policy measures for targeted advertising. As per a Wall Street Journal report, Meta may charge $14 per month for ad-free Insta service on phones and $17 per month for ad-free Insta plus FB service on desktops. If a user wishes to use the free services, he/she has to agree to receive personalized ads in the apps.
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More on Meta’s Paid Subscription Proposal
Meta has submitted a proposal to the European regulators for consent before launching the “subscription no ads” (SNA) plan in the bloc. As per the proposal, Meta will charge EU users roughly 10 euros ($10.46) a month for using Insta or FB on their desktop. Any additional service added to the subscription will be charged an extra 6 euros.
Moreover, for an ad-free service on mobile phones, a single app subscription will cost 13 euros since it includes the commissions charged by Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) app stores. Meta claims to have 258 million monthly Facebook users and 257 million monthly Instagram users in the EU. These users could potentially earn massive revenues for Meta if charged every month.
Meta and EU’s Months-Long Tiff
Ireland’s Data Privacy Commissioner fined Meta 390 million euros at the beginning of 2023 for using digitally targeted advertising techniques. Following this, Meta decided to obtain users’ consent before sending the personalized ads to them. The targeted advertising mechanism earns huge dollars for the social media company.
In recent months, social media platforms such as Snapchat (NYSE:SNAP) and X (Twitter) have introduced paid subscription models as a way to boost revenue. Meta’s latest attempt at charging users could draw the flak of EU regulators if they believe the subscriptions are too costly for average users. The European watchdog could insist Meta offer cheaper plans or completely free ad-free services to its users.
What is the Price Target of Meta Stock?
Yesterday, Truist Financial analyst Youssef Squali reiterated a Buy rating on META with a price target of $390 (27.1% upside). The five-star analyst is optimistic about a strong growth recovery in Q3 and sustained growth in Q4. Squali remains encouraged by Meta’s developments into artificial intelligence (AI)-based user experiences and hardware, which were revealed at its Meta Connect event last week.
Further, five-star analyst Brad Erickson of RBC Capital maintained his Buy rating on META yesterday and set a price target of $400 (30.4% upside) on the stock.
Based on the 34 Top Analysts who recently rated META stock, 33 have given it a Buy rating against one Hold rating. Top Wall Street analysts are those awarded higher stars by the TipRanks Star Ranking System. This is based on an analyst’s success rate, average return per rating, and statistical significance (number of ratings).
On TipRanks, Meta Platforms earns a Strong Buy consensus rating. Also, the average Meta Platforms price target of $381.33 implies 24.3% upside potential from current levels. Year-to-date, META stock has gained a whopping 146%.
