Most likely Facebook is making more than $70/year/person from users who are willing to pay $70/month for ads-free experience.
The reason for that is that usually only people with higher than average income are willing to pay for their ads-free accounts.
People with higher than average income - are more appealing target for advertisers. So, most likely, Facebook is making more ad revenue than average from wealthier users.
Advertising allows to "implicitly charge" wealthier users more than poorer users.
> Most likely Facebook is making more than $70/year/person from users who are willing to pay $70/month for ads-free experience.
I think you mean "willing to pay $70/year". Fine, set the price at whatever the break-even point is (how much FB thinks they can make from ads for the type of person they expect to be willing to pay for the free version). At least then we'd be able to make a choice. Right now, we have none.
> set the price at whatever the break-even point is
1) That paid option would remove the wealthiest part of the potential ad audience. The higher the break-even point is - the wealthier slice of audience it will remove.
2) Such premium option may, actually, work. For example, Youtube has $11.99 per month Premium subscription option.
Did you sign up for that?
3) I am not sure if Facebook will implement that premium option, because managing ads-free premium option would add complexity to their codebase.
The reason for that is that usually only people with higher than average income are willing to pay for their ads-free accounts.
People with higher than average income - are more appealing target for advertisers. So, most likely, Facebook is making more ad revenue than average from wealthier users.
Advertising allows to "implicitly charge" wealthier users more than poorer users.