Under increasing pressure from investors to break through the slow growth, Twitter is reportedly getting serious about offering a subscription product to create a new revenue stream. Advertising will remain the social network’s bread and butter for the foreseeable future, but Bloomberg says we could get an update on subscription plans as soon as Twitter’s latest earnings come out Tuesday.
Twitter’s earnings last quarter exceeded expectations, but the new user numbers disappointed Wall Street and there is a growing perception that the platform may hit a ceiling with its audience. That means it is time again to think about new ways to squeeze blood from this stone. Bloomberg’s sources claim that various teams at Twitter compete to develop subscription options with features such as tips and / or charging a fee for TweetDeck looking for the most likely choices for launch.
The idea of cutting a fee from tips users send to their favorite influencers has already had success on Twitch and other services, so trying it on Twitter sounds relatively painless. The idea of charging a subscription fee for some sort of enhanced version of TweetDeck would be more of a gamble, but it could serve as a test of power users’ tolerance for a paid model.
NYU Stern professor Scott Galloway became a bit of a punching bag last week when he did tried to explain the GameStop stock explosion as a product of horny guys who don’t have enough sex. But Galloway’s galaxy brain overshadowed a fairly compelling article he wrote for New York Magazine that states that Twitter leaves money from influencers on the table. The professor, a disaffected investor in Twitter, sees a future where Twitter charges users a monthly fee when they exceed a certain number of followers. The fee would cover access to improved analysis tools. According to Galloway’s calculation, Twitter only needs 15% of its user base to cough up $ 10 a month to completely replace its ad revenue.
But replacing ad revenue doesn’t seem to come first for the business. In a statement to Gizmodo, Bruce Falck, Twitter’s revenue product leader, said that increasing “ revenue sustainability ” is the number one goal, and that the company will experiment with non-ad-based revenue by 2021 . “This could include subscriptions and other approaches that give people and businesses of all sizes on Twitter access to unique features and enhanced capabilities for content creation, discovery, and engagement,” said Falck, emphasizing that the team does not expect any of these experiments. “will generate some meaningful income. in the following year.
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A subscription version of TweetDeck could give Twitter an indication of the level of interest companies and influencers would have in a full pay-to-tweet model. If the company’s key users cough up a few dollars for an ad-free experience with better organizational options and stronger analytics, they might be willing to go all out.
According to Bloomberg, other income options on the table include billing: ad-free feeds, higher quality video uploads, verification, and custom profile looks. Those options seem pretty small on their own, but can be attractive when put in a package.
Perhaps the most radical idea put forth is an option for popular users to provide a separate feed of exclusive content for subscribers. Twitter could take a small discount on the subscription and would never have to ask users for money directly. But that can lead to long-term issues as the company’s top users post their best tweets behind paywalls rather than feeding the wider network.
Twitter has been throwing around ideas like this for quite some time, and while investors are looking at Facebook’s stock price with envy, the fact that Twitter is barely changing is one of the things that make it unique. We might get a surprise announcement on tomorrow’s earnings call, but don’t expect Jack Dorsey to step outside of his comfort zone anytime soon.