Twitter is building a subscription product as a way to ease its dependence on advertising – a plan the social network has considered for years, and one that has taken priority given the pandemic and pressure from activist investors to accelerate growth. The majority of Twitter’s revenue comes from targeted advertising, which serves up promoted posts aimed at specific groups of users. That business has grown in recent years at a slower pace than competitors like Facebook Inc. and Snap Inc., and Twitter’s slice of the digital ad market globally remains at a lackluster 0.8%, according to EMarketer.
Twitter, the thinking goes, would benefit from a separate revenue stream that isn’t as reliant on brand advertising. The company’s user base in the US, its most valuable market, has also started to plateau, meaning it can’t rely on simply adding users to juice revenue. To explore potential options outside ad sales, a number of Twitter teams are researching subscription offerings, including one using the code name “Rogue One,” according to people familiar with the effort.
At least one idea being considered is related to “tipping,” or the ability for users to pay the people they follow for exclusive content said the people, who asked not to be named because the discussions are internal. Other possible ways to generate recurring revenue include charging for the use of services like Tweet deck or advanced user features like “undo send” or profile-customization options.
Subscriptions have always offered a tantalizing alternative to advertising, but social networks have traditionally stayed free as a way to encourage user growth and engagement, which is then subsidized with paid marketing posts. Twitter tested the idea of user “tips” in the past with its soon-to-be defunct live video service Periscope, and it’s become a popular business model for companies hoping to help creators make money from their fans or followers. Twitter would take a cut of the transactions.
The company is also considering charging some power users for a suite of services, which might include a Tweet deck, a sort of dashboard useful for viewing multiple feeds and overseeing different accounts. The service is typically used by Twitter’s more advanced users and lets them follow multiple streams of tweets at one time. Tweet deck is currently free and doesn’t have ads, which makes it appealing to some users as an alternative to the main feed.
A recent survey from July, discovered by journalist Andrew Roth, also shows that Twitter is weighing whether consumers would pay for special features, like an “undo send” option or custom colors for their profiles.
Here’s a summary of some possible features or services the company could charge for:
- Ad-free feed – This may be a popular idea among consumers, but there are some, including Facebook’s Zuckerberg, who says offering users the ability to buy their way out of targeted advertisements and data collection is unfair because it rewards economic advantages. Doing this would also put Twitter’s most prominent business at risk.
- Tweet deck – Power users love Tweet deck, which has never had ads or generated revenue because they can get tweets from multiple timelines in real-time. Twitter has considered charging for Tweet deck before.
- Exclusive content – This could be rolled out in many different ways. One option would be to let users charge followers for a separate timeline of their tweets. It’s similar in concept to a newsletter business. Some tweets are available to everyone, but others – perhaps analysis or breaking news tweets – cost extra. Twitter just acquired Revue, a newsletter startup, so it’s clear the company is interested in this general model.
- Higher-quality video – Segal has mentioned this idea, which makes more sense for video creators who want to upload high-quality video or clips that are longer.
- Verification – This idea could be popular among users, but seems unlikely to gain ground within the company. Verification is intended for “notable accounts,” according to Twitter, which indicates it doesn’t think verification should be for sale. Twitter surveys have shown that it is considering a verification badge for businesses, though it’s unclear what that would involve or if the company would charge a fee.
- Analytics – Users already get some free analytics, like how many followers someone added in a month and how many impressions posts get. But there is much more Twitter could offer, like follower demographics or what times are best for posting. Segal and user surveys have signaled the company is considering this option.
- Consumer features – This could include custom colors, hashtags, or stickers for user-profiles and posts. These kinds of small upgrades work with some messaging products, so there could be an audience for them on Twitter.
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