Introduction : Controversy over paid Instagram and Facebook
Facebook and Instagram, a type of social network service (SNS) used evenly by all ages, face a future that will be paid. As advertising has been decreasing due to the recent global economic downturn and advertising regulations have been tightened, the company has started to generate new profits. Meta announced on Oct. 30 that it would introduce a subscription service that charges Facebook and Instagram, which it has been offering for free so far. "In order to comply with evolving European regional regulations, Facebook and Instagram users can continue to use the service for free with ads from November, or be offered an ad-free plan option," Meta said. The service is first introduced in the European Union (EU) and Switzerland. The paid subscription service fee is 9.99 euros (about 14,000 won) per month on the web, and 12.99 euros (about 18,000 won) per month on Google Android and Apple iOS smartphones. Service users can use SNS without advertisements, and these data are not used for advertisements. Meta's paid service is due to a decrease in advertising revenue due to the EU's tightening regulations on personal information protection. In the meantime, Meta has made profits from customized advertisements using user information instead of providing Facebook and Instagram services for free. However, EU countries are tightening regulations by disposing of fines worth tens of billions of won or filing lawsuits, claiming that Meta did not obtain prior consent in the process of collecting personal information for advertisements. "Advertising-free plan options will balance the requirements of European regulators, giving users a choice," Meta explained. Prospects vary over Meta's pay-per-view move. As it is not easy to abandon an existing company that has already established a network with many acquaintances and transfer to a substitute, there are mixed observations that they will cry and use it as a substitute, and skepticism about the increase in paid subscribers. In fact, the reality is that only a few users of other SNSs, X Premium (Twitter Blue) and Snapchat, are paying services, so they cannot be linked to monetization. Meta says that Korea is not considering paying. It is explained that the paid service is a response to EU regulations. What kind of company is Meta that runs Facebook and Instagram services, which are already having a huge impact on our lives?
What is Meta?
Meta is a comprehensive IT company in the United States. Under the leadership of Mark Zuckerberg, the current CEO, five people, including him, founded the company. Starting with Facebook, the birthplace of the company, it develops businesses such as Messenger, Instagram, WhatsApp, and Meta Quest. As of 2021, it was the fifth U.S. market cap to reach $1 trillion. Mark Zuckerberg, founder of the company, said at the Connect conference, Facebook Developers' annual online event, on Oct. 28, 2021, that he would change the company name from Facebook to Meta. The stock code on the Nasdaq, which used to be 'FB', was changed to 'META', which means metaverse, effective December 1, 2021. The mission of Meta is derived from the metaverse and has expressed its intention to use the metaverse as its main business model in the future, breaking away from the existing business model focused on advertising revenue from social media. There is a response that it is aimed at breaking through internal and external crises such as whistleblowing and regulatory movements and securing new growth engines. In fact, since the name change, Oculus, a VR device service, has been integrated into MetaQuest under Reality Lab, Meta's metaverse development division, and has been aggressive by investing astronomical costs. The main service is Facebook first. Facebook is the world's largest social media seeking an extension of neighborhood networking. Also called BlueApp. The second main service is a messenger that is commonly known as a Facebook messenger. This is the largest instant messenger in the United States. While WhatsApp, another major messenger service, claims security, the messenger uses lightness as a weapon. The third main service is WhatsApp. WhatsApp is the largest instant messenger in Europe. It ranks first in most countries except the United States, where text messages and e-mail are frequently used, East Asia, where local messengers such as KakaoTalk and Line dominate the market, and some countries where global companies have not entered the market properly due to their regional specificity. The fourth main service is Instagram. Instagram is a social media that focuses on photographic content. The age group is younger than Facebook and the networking range is wider. The fifth main service is Thread. Thread is a decentralized social media launched in July 2023. It aims to create textual content based on Instagram. We don't collectively call the service, but there's also a reality rap. Reality Lab is Meta's metaverse development division. Starting with the Facebook AR/VR team, it was reborn as a separate division in 2020. It is also a business department that Meta is currently putting its life and death into.
History of Meta
Meta began with the development of its Facebook service in January 2004. After launching the service within Harvard University in February, it also entered other universities. In June 2004, PayPal founder and author Peter Thiel, known for his "Zero to One," joined as an angel investor, securing a 7% stake for $500,000, meaning the first individual invests in a startup. In March 2005, a venture capital called 'Excel' secured a 12% stake for $13 million and conducted Series A funding. Start-ups are divided into Seed Investment and Series A through E by investment stage. The next step is called Exit, which is an IPO or M&A. After growing steadily, it became a unicorn company in June 2005 after receiving Yahoo's $1 billion acquisition offer. Here, a unicorn company means a start-up with an enterprise value of more than $1 billion within 10 years of founding. In June 2007, Microsoft invested 1.6% in $240 million. In March 2008, Google hired Cheryl Sandberg, who built an advertising revenue model, as COO. She is a legendary figure in Meta along with Mark Zuckerberg's founder and a very recognizable figure. In June 2008, it failed to buy Twitter for $500 million and added a status wall feature to its newsfeed to mimic Twitter features. Since then, Meta has built a social media empire by quickly acquiring or copying services that are threatening to its services. In August 2008, the number of monthly users (MAU) exceeded 100 million. In July 2010, the number of MAUs exceeded 500 million. In April 2012, it acquired Instagram for $1 billion. In May, it was listed on Nasdaq for $104 billion, and succeeded in attracting $16 billion in investment. It was the largest listing in Nasdaq history at the time. Soon after, in October, the number of MAUs exceeded 1 billion. Acquired WhatsApp for $19 billion in February 2014 and Oculus for $2 billion in March. In May 2016, Rodrigo Duterte won the Philippine presidential election thanks to fake news on Facebook, and in November, Donald Trump won the U.S. presidential election based on fake news. In the wake of these events, Facebook faces a huge problem of fake news. In October 2021, the company changed its name to Meta. Fired 21,000 workforce from November 2022 to April 2023. LLaMA-2, a mega language model, was unveiled as generative AI became popular.
What is a Metaverse?
In 2020, the metaverse craze began with what Jansen Huang, chairman of semiconductor company Nvidia, said was coming. This is due to the prolonged non-face-to-face daily life caused by the pandemic, which has led to longer time for people to spend in virtual spaces. The metaverse is a combination of meta, which means transcendence and virtual, and universe, which means world, and is derived from the virtual world name 'metaverse' in the novel 'Snow Crash' published in 1992. It is a new word that collectively refers to various forms or contents that implement interactions in real life in virtual space. Typically represented by virtual reality and augmented reality. Virtual reality distorts reality or brings users to virtual environments in completely different virtual world types. For example, there is a scene in the movie 'Red Player One' where the characters wear VR devices and play a virtual game called 'Oasis'. Augmented reality is a technology that expresses virtual objects in real-time to the reality shown on the screen through a camera. For example, in the movie "Iron Man", there are scenes where Iron Man aims at the enemy and sets the flight path with the AI secretary "J. A. R. V. I. S".
Investing in XR(AR+VR)
Facebook is investing heavily in metaverse-related businesses, such as changing its name to "Meta" after realizing that it has a future in the metaverse. In the first place, the vision is 'Connection is evolving and so we're', so the development of the metaverse is needed for better connection. Reality Lab is Meta's metaverse development unit, which is the main unit that exists outside Meta's social media business. It was established to reduce dependence on advertising revenue from social media, and the history of the business began with Oculus, a VR device company acquired in 2014. Oculus founder ‘Palmer Luckey’ has developed a game-oriented business, while Mark Zuckerberg says the metaverse has seen great potential for social functioning just like the main business. However, there were very few companies trying to enter the market because the market in the field was small and a connection with an external computer was essential to drive the device at the time. As a result, Meta has been very aggressive, investing huge cash flow generated by Facebook and Instagram to establish Oculus Studios and acquire leading game producers. Since it lost the competition for market dominance by giving Apple and Google mobile leadership in the past, it means that it will quickly enter the emerging metaverse market and strengthen its dominance by preempting standards and operating systems. Reality Lab creates a VR HMD (Head Mounted Display) device called Meta Quest. The newest model is the Meta Quest 3.
The annual event, "Connect 2023"
Meta Quest 3
At this event, Meta unveiled its personal AI assistant 'Meta'. You can talk to Meta AI by saying or entering "Hey Meta," and the basic interface is Meta's messenger service, WhatsApp. MetaAI such as ChatGPT is created on WhatsApp, so you can ask questions at any time, and you can call MetaAI in the group chat room to ask questions. In addition, Meta creates several AI chatbots with various purposes and personalities. In particular, it borrowed the faces of celebrities and created an AI chatbot with each personality. When I talk to this chatbot, the faces of celebrities like Paris Hilton, Mr. Beast, Kendall Jenner and Snoop Dogg open up and create a message like I'm talking to them. Of course, I'm not talking to Paris Hilton, but I'm consulting AI called Amber, who looks like Paris Hilton. This kind of service is a character. The unicorn company called ai has already been very successful. Meta uses the power of a large company to bring IPs of celebrity faces to give each chatbot personality. Meta says voice features will also be introduced soon. Another feature added to WhatsApp is the AI-powered 'emoticon (which is called a sticker in the United States)' creation function. Stickers can be created according to the text entered by the user and sent to others.
What we revealed at this event is an upgraded Rayban smart sunglasses. Smart sunglasses enable Instagram live. Unlike doing live broadcasts with a normal smartphone camera, I can deliver what I'm seeing to the viewers as it is. This first-person perspective broadcast can be a new content for creators. Smart sunglasses are equipped with meta-AI, which allows you to issue commands by voice, and smart glasses can be an important AI device.
Generative AI is heading in what we call a multimodal. It means that AI recognizes all text, voice, and pictures. The most convenient way for us to interact with AI is to give orders by saying, 'Tell me what I'm seeing.' Meta Smart Glass appears to be looking in that direction. Andrew Bosworth, Meta CTO, said, "Even before generative AI emerged, we were developing smart glasses (as a form factor to communicate with AI)," adding, "I think there is a great potential for smart glasses." There has been a recent move to develop hardware for Generative AI. New hardware beyond smartphones is expected to come out.
It will take time for XR/Metaverse/spatial computing to become popular in the future, but existing barriers are also being lowered one by one. How soon will the future come? 10 years? Is it 50 years? What is certain is that Meta is constantly innovating every day for a new era. In Steven Spielberg's movie "READY PLAYER ONE", the characters wear XR devices and immerse themselves in the virtual world of "Oasis". Meta is one of the most likely companies right now to make movies a reality. Looking forward to a future where people show off their richer imagination in a better environment.