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JeremyLeeSecondEssay 5 - 06 Jan 2021 - Main.JeremyLee
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| META TOPICPARENT | name="SecondEssay" |
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| | | A. A Sound Business Decision | |
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< | From 2011 to 2019, Facebook's annual ARPU grew from $5 to about $29 (USD). This metric is calculated by dividing total revenue by number of users and "shows how effectively companies monetize their users."[1] Here, the relevance of understanding the ARPU of "free" technology platforms rests on the proposition that the costs of a subscription model could mirror a company's ARPU. With this configuration, users and platforms are able to realistically transition from "free" to paid because (i) the service would not be prohibitively expensive and (ii) fairly compensates the companies for their lost advertising revenue. Granted, however, when you consider the feasibility of a subscription model to a service that has seen financial growth of nearly 600% in just eight years, the future affordability of such a service is in question. But those concerns may hold little weight; technology platforms, and Facebook in-particular, are in danger of "becoming victims of their own success."[2] As more users sign-up, the "pool of potential new users" shrinks; but what's more, specifically with Facebook, the number of active users has declined recently and is predicted to "remain flat or decline" in the future.[3] These challenges faced by technology platforms suggest that ARPU has plateaued and is unlikely to continue the same exponential growth of the last eight years. Therefore, assuming a stabilized ARPU, users who choose a subscription contract can achieve some level of reliability that their costs will not mushroom. | >
> | From 2011 to 2019, Facebook's annual ARPU (Average Revenue Per User) grew from $5 to about $29 (USD). This metric is calculated by dividing total revenue by number of users and "shows how effectively companies monetize their users."[1] Here, the relevance of understanding the ARPU of "free" technology platforms rests on the proposition that the costs of a subscription model could mirror a company's ARPU. With this configuration, users and platforms are able to realistically transition from "free" to paid because (i) the service would not be prohibitively expensive and (ii) fairly compensates the companies for their lost advertising revenue. Granted, however, when you consider the feasibility of a subscription model to a service that has seen financial growth of nearly 600% in just eight years, the future affordability of such a service is in question. But those concerns may hold little weight; technology platforms, and Facebook in-particular, are in danger of "becoming victims of their own success."[2] As more users sign-up, the "pool of potential new users" shrinks; but what's more, specifically with Facebook, the number of active users has declined recently and is predicted to "remain flat or decline" in the future.[3] These challenges faced by technology platforms suggest that ARPU has plateaued and is unlikely to continue the same exponential growth of the last eight years. Therefore, assuming a stabilized ARPU, users who choose a subscription contract can achieve some level of reliability that their costs will not mushroom. | | |
B. Data Privacy as a (fundamental) Right |
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