A few years ago, Apple and Facebook considered a subscription-based revenue-sharing agreement to provide an ad-free experience. The two giants finally parted ways.
Facebook and Apple have been feuding for years; Apple announced during WWDC 2020 that iOS will now require apps to ask users for permission to track ads. In the months that followed, Facebook struggled to oppose Apple’s plans, predicting more revenue volatility with such changes, but the feature was eventually introduced in iOS 14.5 in April 2021. Surprisingly, an article in The Wall Street Journal today claims that Facebook and Apple have been working on a partnership and revenue-sharing agreement primarily out of this.
Apple and Facebook considered a revenue-sharing deal a few years ago
According to the American daily, Apple and Facebook have given serious consideration to a subscription service that would allow subscribers to take advantage of an ad-free version of the platform. And since the Cupertino company takes a commission on in-app purchases, including subscriptions, this deal would be very, very lucrative.
around a subscription to offer an ad-free experience
Another arrangement that appeared to have been discussed and eventually squabbled between the two parties was the willingness of the Apple brand to charge a commission for “promotional posts”—paying for a post is seen by a wider audience than usual. Facebook has long considered promoted posts as part of its ad portfolio; As The Wall Street Journal notes, small businesses often use promoted posts to reach more users. The conflict arose when Apple felt that promoted messages should be treated as in-app purchases, which would therefore be subject to a 30% fee charged by the Cupertino-based company. Facebook, for its part, claimed that these were promotional products that were not in fact
Since the ad tracking changes were made in 2021, 37% of iPhone users have chosen to allow businesses to track their activity through apps, according to industry firm Insider Intelligence. And since the change went into effect, Facebook (now Meta) revenue has dropped significantly — last quarter, Meta reported its first-ever drop in revenue.
The two giants finally parted ways.
These discussions were to take place between 2016 and 2018. As they say, the water has flowed. Right now, Apple is doing its best to position itself as the great protector of user privacy and Meta, well… Meta is trying to democratize the metaverse, but for the time being, ads remain Meta’s main source of income. Therefore, the company will have to continue to adjust its operations in this world in which the iOS application is protected by tracking protection among a large number of users.