Details like these go through extensive A/B testing. Clearly, Meta has found that gating their content behind a login prompt leads to greater engagement and revenue growth. For what it's worth, I eventually created an Instagram account because of these prompts. The strategy works.
Additionally the infrastrucutre is not free either. Even without ads (which is fine by me), serving up the full suite of tools to logged out users is very expensive and much harder to control
At our company we're trying to do the same thing now, supporting logged out users is just too expensive and not worth it.
I would argue it’s actually easier to serve content to logged out users as you can cache the whole response and serve it at the edge. Then it “just” becomes a cache expiration problem.
Correct, we push static assets to the edge. However not all SASS products are the same, there is a spectrum of features that can be pushed to the edge and some cannot. The engineering comes from cost, usability, reliability, etc...
it's just artificial growth, though. You're not generating any more engagement than if they'd just show you the content as a guest. Unless you also started using the app as a result of creating an account.
The growth may be artificial and not sustainable, but the money it brings is real, and can be invested (or consumed) sooner than later. Opportunity cost is a real thing :-\
