Facebook Users to Pay Monthly Fee for Apps, Games

Dennis Faas's picture

Facebook plans to allow companies to charge monthly fees for the use of applications on the popular social media website. This new policy could create a lucrative market for Facebook versions of newspapers, magazines, and more.

At the moment, it's not possible for software developers to charge people who like and use their applications on Facebook. Instead, they can charge only for one-off purchases that people make within the application itself.

The best known example of this is Zynga's Farmville. Currently, users can play the app free-of-charge. But if they want to get an extra advantage within the game (such as buying virtual crops), they must pay a small fee.

Farmville-Like Games Hugely Lucrative

Although the vast majority of Facebook users don't play such games, the incredibly large number of Facebook members can make any application enormously popular, even when only a small percentage of Facebook's total user base take advantage of it.

That's why, by the end of last year, Zynga was taking in more than $100 million each month from Facebook members' small payments. (Source: sfgate.com)

Starting in July, companies will no longer need to rely for income on constantly exhorting their users to make extra, in-game purchases. Instead, they can offer direct subscription deals as low as $1 per month.

As with the one-off purchases, Facebook will administer these payments and take a 30 per cent cut. (Source: facebook.com)

The most immediate impact of this change: game companies will likely begin offering their software on a limited trial basis. To play the full game, players will have to pay a monthly fee.

Many observers believe the proposed pricing structure is advantageous for game companies: by charging just $1 per month, the game appears very cheap. However, players who subscribe for a year or more contribute substantially to the company's revenues.

Subscription Magazines Coming to Facebook?

Newspapers and magazine publishers may also utilize this new Facebook subscription model.

There doesn't seem to be any technical advantage to displaying a publication on Facebook. But publishers may find that people who have already linked their payment cards to Facebook are easier targets for subscriptions.

Publishers could also make use of Facebook's social media power by allowing subscribers to share some of their content with friends, effectively promoting the publication to new audiences.

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