Twitter has a new CEO – what about a new business model?
stratechery.com
stratechery.com
Am I reading this correctly, that he believes Twitter would retain considerably more than two thirds of their daily addicted users if they asked them for ~$4/month? Even two thirds sounds grossly unrealistic to me. I would be astonished if even one in ten stayed. I’d even be more than a little surprised if one in ten stayed if you asked them for $1/month.
(I’m mostly a non-spender and non-user of social media. All I’m basing this on is my feelings and observations of the fickleness of consumption and people’s commonly-irrational behaviour around free things.)
There is one plan which they've never considered and probably never will: something like Twitch, where you can pay for the "content creators" you like.
Twitter rolled out Super Follows[1] and Twitter Blue[2] a few months ago
[1] https://blog.twitter.com/en_us/topics/product/2021/introduci... [2] https://blog.twitter.com/en_us/topics/company/2021/introduci...
super-follows launched widely around the same time, after being in private beta since september. at least in my anecdotal experience, i see quite a few high-profile twitter personalities have enabled it - no idea how many people are actually paying them though.
The Hacker News force is strong in this one.
on edit: born of familiarity with the genre here, but no there is not going to be a great upswelling of everyone running to spin up local mastodon instances. Except in some of the techie market, and not even all of us have the time for that.
The real problem with Mastodon, is that it's too similar to Twitter! People try out new sites because they have something different in terms of content creation or consumption (Discord, with its real-time communication and flow of conversations, Tiktok for its instant video creation and consumption, etc...) But Mastodon has nothing new to show off, since it's basically a Twitter clone (yeah, with some extra features like federation, but seriously why use it when you have Twitter?)
Mastodon has basically become Twitter for ex-Twitter people who don't want to deal with ratios and wild crowds and have their own "cozy" space. And I've observed people trying to move to Mastodon and realize it's a very quite place and immediately jump back in on Twitter after a month... I understand that there is a niche of people who dig that kind of cozy stuff, but most people still just love the wildness of Twitter where anyone can be commented on, retweeted, quote-tweeted, "ratioed", and "get judged and fucked by the audience". Yes, it's also one of the most horrible and deranged places of the Internet, but people accept that and still log in because we have our own death drives to fulfill. We know that cigarettes and drugs are harmful, but isn't that the point?
Twitter also has chronological timelines, there’s a button on the top right.
> The fediverse is small compared to Twitter user base, but with millions of users there's plenty to explore and engage with.
…no, there isn’t. The population mainly consists of cartoon child porn artists and enthusiasts (pawoo.net), tech people (official and semi-official instances), small groups of queer people (on smaller closed instances), and that’s mainly it (from what I’ve seen). Engagement on smaller instances seems to be very low, with most toots being 0-1 likes and almost no comments posted on them.
> And there's better netiquette in general.
No, mob/clique mentality from Twitter is already there (but even more amplified by the federation aspect, since instances can ban other instances) The reason Mastodon doesn’t have that much drama is simply because there aren’t enough people there, and I predict a mass migration to Mastodon will be accompanied by the most dramatic controversies.
Since I don't have enough karma to downvote I'll say why I hate this kind of comment.
1) It violates HN's comment guidelines, "Be kind." "Please don't sneer, including at the rest of the community. "
2) It tries to put you above all the "nerds". As if you're so much smarter than the borderline asperger nerds that are somehow incapable of putting any thought into usability of products.
3) You're one of us, you're here on Hacker News. This is a giant non-monolithic forum.
4) It lacks imagination and it's stuck in the status quo. Innovation doesn't just appear fully formed out of a slick FAANG press conference. Innovation happens one curious motivated hacker at a time pushing barely usable tech forward while people like you sneer at them.
At least, this is the logic I and the rest of my Twitter circle (which is fairly large! I've met probably 50-100 people irl through Twitter, got my job through Twitter, have two accounts with follower counts in the thousands, etc) would likely use if planning to jump ship. People who treat Twitter as a pure feed rather than as a social space might be willing to pay, but part of what makes Twitter such a great news source is that _anyone_ can post current happenings, and how many of those _anyones_ with small accounts will be willing to pay just to use the platform once every week or two?
Of course, Twitter could get around all this by having paid accounts for power users only, but then many of the most important and largest accounts would jump ship and devalue the platform for everyone else, leaving only paid marketing accounts that cater to fans and brands. Not a great situation.
Point being, it's a hard problem, for Twitter to monetize without losing the thing that makes it a great platform, and my guess is charging all users a flat subscription fee ain't gonna cut it, and would produce an exodus to the next-most-similar platform, i.e. Mastodon.
In fact, the domain of your account could actually be a huge social symbol. Maybe celebrities use @verified.social while everyone else gets @twitter.com or @trump.social or whatever.
They will never do this.
Twitter has become a self-absorbed status tool for people who believe the supposedly correct things. These days, one of those things is thin-skinned censorship. Allowing payments would reveal that their most popular users are people that do not agree with the worldviews of the Twitterati.
If it comes down to charging marketers for some hand-wavy conception of "reach" that can't be attributed, or direct attribution that would definitively show that Twitter is a biased dumpster fire, Twitter will always pick the former.
Matrix and/or IRC works REALLY well for me, for the most part.
I am on discord mostly because pre-existing communities/not having any alternative.
Overall, Discord is just a lot better for getting small groups spun up quickly. That said, I also have to use Discord for certain work client communities (mostly in the crypto space), and it's annoying to maintain a separate professional Discord identity from my social one. The compromise I've settled on is that I use social login in the web client and work login on Desktop, but on mobile I have to pick one or the other, or do a lot of annoying login switching. So, to some extent, I totally agree. Ironically easier to SSH into my server on my phone and run tmux if I need to access my various IRC sessions.
Someone else would simply step in and fill their shoes with an ad model. The ad model works exceptionally well. Twitter's primary problem is and always has been cost bloat. They should have 30-40% operating income margins; instead it's more like 7%. They have always been very poorly operated and very poorly structured as a business. They did $357m in operating income on $4.8b in sales the last four quarters. When Facebook was that size they had 25-30% operating income margins (while growing very fast), there's no reason Twitter shouldn't be able to at least match that at this stage of their business life (there isn't some great 80% growth surge coming next year that they need to be prepared for, staffing up ahead of time).
Subscriber counts for a handful of subscription companies:
Netflix: 209M
Amazon Prime: 200M
Spotify: 165M
Disney+: 118M
Youtube Premium/Music: 50M
Hulu: 44M
Charter: 30M
NY Times: 8M
WaPo: 3MNone of them even remotely have Twitter's reach, and more importantly content creators ranging from heads of state to Nobel Prize winners to A-list celebrities.
I'm reminded of my OH's retort to someone reportedly claiming fluency in multiple languages, "Great, but do they have anything interesting to say in any of them?"
I'm just not interested in Twitter as a source of information. For me, it's a last-ditch-saloon means to complain to companies who can't or won't publish a customer services email address. That's all.
Good for you, but there are millions of people who don't share this view, including the whole point of this discussion is for those people.
"Good for you," It seems like you were so mad you forgot how grammar works. Maybe take a few days off from your rage echo chamber. I'm pretty sure whatever you were trying to say was wrong, and you provide an example of why discussions about Twitter aren't relevant only to Twitter users. The majority of people, who are disgusted by Twitter, want it gone, because they don't like what it does to people like you. It turns them into these raging bot-like NPCs who can't even speak in intelligible sentences, which makes it easier for Big Brother to control everything, because instead of rightly hating Big Brother, it's brainwashed you into hating people who advocate for free speech and don't want everything in life controlled by whoever happened to inherit the most money.
What’s twitters general concept? 140 word tweets that are intended to have very little thought go into them in general. That to me is poor quality content.
Yet many people pay for the twitter API data stream already.
If your ad spend is greater than ~$5k, you get a twitter liaison that can fast-track verification.
I guess not many people do as I do. But promoting one’s stupid tweets is a pretty good indication of someone I do not and will never have any interest in hearing from… I suppose I might make an exception for a sufficiently funny/edgy promoted tweet, but I also suspect that twitter enforces stricter content rules on promoted tweets?
Yep. They don't even need to go to subscription model to be profitable. Keep on doing what they're doing, maybe trim the employee headcount to something more reasonable, and continue to enjoy modest - as in, unsexy but consistent - year-over-year ad revenue gains.
Their massive headcount is mostly just a drain on profitability, and very hard to argue there's much value add.
Certainly infra, data science etc takes headcount, but last I heard Twitter has hundreds or thousands of product devs and their product has had close to 0 changes in the last 5 years. What do these people do all day, really?
I mean, they are flat from their 2013 IPO, while basically every other tech has rocketed.
People who work on Twitter, who have built a large following, who use Twitter to propagate messages, to network with peers, and to learn facts and rumors, would pay not just $4/month but $4000. Whatever the price Twitter would charge journalists, they would gladly pay; it's a cost of doing business.
Actually, in addition to being a business expense, Twitter is a super-addictive dopamine hit ego booster, a game that makes it's high-scoring players feel important.
Twitter's problem is that it makes the low-scoring players feel bad. To use Twitter without a Blue Check is just not that valuable to most people. Just like the Twitter elites derive a sense of self-importance from their internet followers, the Twitter masses feel a sense of illegitimacy, an angst against the platform for driving the public discourse into a dumpster fire.
As long as Twitter provides news and entertainment, it'll get used. But Twitter insiders and power users (Blue Checks) would be well-served to heed the infamous advice: "Don't get high on your own supply."
Black Rock and Cato pushed Dorsey out. I thought this was common knowledge and a clear sign of where Twitter is headed (and indeed where some notorious Twitterers would have liked it to go a while back).
Getting high on ones own supply is precisely the point. Its meant to be addictive, for Twitterers and followers alike.
1. https://www.cato.org/blog/brief-history-deep-deplatforming 2. https://www.cato.org/policy-analysis/why-government-should-n... 3. https://www.cato.org/blog/keep-government-away-twitter
I had someone spoof my profile a while back. (Chose hard to tell apart user name and used my profile pic etc. to do some crypto spamming.) Twitter promptly nuked their account but wouldn't verify me afterwards.
If Twitter thinks you're not morally good, they will actually remove a blue check which they previously granted (e.g. they did this to Milo Yiannopolous). If blue checks were just about identity veritifaction, this would make no sense since Milo's account's identity was never in question. Ergo, it isn't just about identity verification.
[1] https://twitter.com/annakhachiyan [2] https://twitter.com/alexandracooper
Yeah. That's what people are annoyed about. That wasn't twitter's public position.
[0] https://theoutline.com/post/1323/verified-blue-checkmark-der...
Then came the Great Bluecheck Purge, where anyone exhibiting opinions not preferred by Twitter management had their blue check revoked/denied - which in practice was applied generally to Republicans, who constitute about half the USA. (We're talking mainstream views, not just weirdos.)
Ergo, anyone with a blue check is, by Twitter decree, not a Republican. For Republicans, blue check now amounts to a "badge of shame" indicating Twitter-approved opposition.
Blue checks were changed from "identity confirmed" to "one of us, not them".
https://www.wired.co.uk/article/twitter-political-account-ba...
For example, the blue check was removed from Milo Yiannopolous (the gay conservative provocateur who was canceled a few years ago), after he was previously verified.
Every "rule" on Twitter is no more than a tool used to create the appearance of left-wing consensus by suppressing alternative views through selective enforcement. Nothing is even-handed, and it's incredibly obvious when you're the target.
please move beyond this a bit and come to the understanding that every single thing Twitter does is arbitrary from rules enforcement, labeling, suspensions, etc. It's the nature of the service, and frankly boring at this point. We could talk more about why the business model sees this to continue (twitter can't disrupt its income stream and the rules that get enforced are those that allow Twitter to stay in business).
I can (sort of, but would rather not) see denying authentication to problematic nutcases of any kind, and can see that edge case not pedantically covered/excluded by “nobody but us”. Sure, we can chalk up fringe cases to inconsistent boundaries of enforcement. But lumping in a plurality of users with edge cases is willful blindness to the blue check exclusion being official from-the-top policy, not mere erratic enforcement of vague rules by underpaid contractors.
Sure it’s boring if you’re not in the targeted plurality. It’s significant when Twitter is your only viable podium in the public town square, and anything you want to say that’s meaningfully & reasonably dissenting may get you kicked out because Twitter management is decidedly biased.
These are verified:
hah. Get a blog. this is a ridiculous assertion.
Twitter is among the best platforms for being heard by the most people with the least cost/effort.
Yeah, I get your point - to wit “get your own press”, a line I’ve used long and often. Nonetheless I recognize the value of a place where a great many congregate to converse with many - and know the importance of that forum being neutral for the betterment of all, a truism Dorsey abandoned for the worse.
the vast majority of the Public (let’s say 90%) never looks at twitter, let alone whatever corner some drama is happening in
as far as getting media coverage (nightly news has even fewer eyeballs) you can do just as well sending out a press release
the greatest trick jack dorsey ever pulled was convincing certain people his platform is somehow indispensable
(I didn't know what a blue checkmark was until I turned off dark mode)
It's an echo chamber problem, but I'm not sure it's deliberate.
The problem's even harder with text - sarcasm and satire just don't come off in pure text. Emoji and "/s" helps, but they're not requisite.
Quite a few accounts I follow also don't have a Blue Check. If it started to cost money, I'm sure a lot of journalists would just choose not to be verified. The reason is that I'm not convinced that a Blue Check is tied to engagement with your Tweets, but rather the quality of your work outside Twitter.
But there’s no way I’m spending $1,000 a year on it if I can’t expense or write it off taxes (right now my usage is a mix of personal and non-personal, so it’s hard to correctly account for it).
But there certainly is a demography who would pay well. Question is where to draw the line.
I don't really agree with this. In my experience as a daily Twitter user, most of the posts I see that aren't from specific sub-communnities I participate in are from low-follower accounts that had one of their tweets go viral. I think generally as long as you have some followers, you're only one timely/clever joke away from hundreds of thousands of people seeing your tweet.
I always found it amusing that common people who are not that interesting share the same platform with influential people / thought leaders / celebrities. The fact you can just cold tweet and @mention a famous person out of the blue is highly parasocial and strange.
Though I'm sure some do actually use it themselves (Musk seems to, for instance)
If Twitter doesn't already do this, then it's dumb, quite frankly, from a business sense due to all the extra labor (in terms of engineers, support, etc) to provide services for these VIPs compared to normal users. Like you said, if these Twitter VIPs are having their cake and eating it too with monetizing Twitter for their own benefit, why wouldn't Twitter ask for a cut.
Twitter's already done what even other major social platform has done and become dependent on advertising revenue. If Twitter becomes all paid and charges even $1/mo, that would wipe out a huge amount of "normal" users that are accustomed to paying the price of free, and then that's going to impact the ad revenue because of lesser targeted normal people to advertise to.
I think the problem Twitter is going to face is how to balance all the plates they have in the air with realistic expectations.
It's the "classic" problem that these platforms want to solve to keep up with investor expectations. So far, there's mostly a bunch of 'little' approaches to this like selling some random digital trinkets or paying for some 'meh' extra features, but these things are like side-dishes that don't reap enough benefits to compensate for appetites of continuous profit expansion.
This is sort of like being torn different ways. From one angle, if Twitter "changing the formula too much" makes the platform worse and people leave, then they don't grow and face shareholder backlash. From another angle, if Twitter hits a wall on monetization and can't figure out how to boost their cap, then Twitter becomes an unattractive investment and will just kinda flatline growth. And finally, people could still just find a new thing to go to anyways and if Twitter does not and stays Twitter, people still might get bored and move over to TikTok or Reddit or whatever.
Basically, even Twitter shows it's still hard to balance reality with desire with mission.
They probably drive a ton of engagement, which benefits twitter.
Twitter licenses premium data APIs. Twitter's "VIP level" users are those that pay significant amounts of money to consume these data APIs to extrapolate whatever sort of information the data can provide.
You can research and confirm this yourself but sources for my assertion:
https://www.bbc.com/news/business-24397472
https://www.fool.com/investing/2017/06/19/what-will-happen-t...
If you're paying money to Twitter for this sort of info, Twitter bends over backwards to support you.
No they wouldn't pay $4000 a month, you vastly over-estimate the willingness of users to pay for social media. Any paid social media was a complete failure. Twitter customers are the advertisers and data hoarders, not the people who tweet.
So I use Twitteriffic now.
Twitter is biased, that's what I think.
It's popular, engaging and has a solid business model. Again, only when you compare it to some of the most freakish outliers in the history of business does it look less than amazing.
Twitter's Board of Directors is a listing of people who've come to expect the projects with which they're involved - either directly or tangentially - or with which they invest, to perform in such a ridiculously obscene manner that even exceptional growth and profits appears to be "underperforming".
For many of these people, there's no problem - where "problem" is defined as 'not being a 1000x bagger stock 5 - 10 years from IPO launch' - that cannot be solved through some alchemical combination of AI/ML, automation, aggressive user engagement, monetization, etc.
Compared to Amazon, Facebook, Google, Netflix, etc., Twitter is an also-ran. Which is absolutely, utterly, unabashedly insane to think.
> Twitter is an also-ran. Which is absolutely, utterly, unabashedly insane to think.
Yes, this is absolutely crazy!
The other problem is how much Twitter is brought up by people and the media. Data shows a minority of the already minority of people who use Twitter, talk politics. Yet you can’t go any time without people pointing to Twitter as a representation of a huge population to prove their points.
For example, reactions to “cancelling” someone will have droves of people and media point to a tiny portion of Twitter saying things that can’t represent the massive demographic people are critiquing.
All of this makes Twitter seem so much more important even to people not constantly around tech, startup, or SV circles.
I hate saying this, but Twitter does have outsized importance even to people not in said circles. That's because there's a concentration of influence on Twitter. Politicians, celebrities and especially journalists are on twitter. That means that the Twitter bubble can both diverge from the general population, then have an disproportionate impact on them.
Comes to mind the scene in Heinlein's Glory Road where the hero stuffs the hostile giant's foot in the giant's own mouth, and pushes hard. Keeps pushing etc, until there's only a ball of wax to dispose of.
(Sidekick's comment: "Didn't know you were good at advanced math.")
Maybe money could come selling from some anonymized data. Even partially government funded. Infrastructure should be decentralized. Maybe you can pay 1€ per month to get more some features.
It takes only tiny fraction what these current companies are making money, to maintain such environment.
Forbidden dystopia...
With today's interoperable protocols you don't need a non-profit provider organization to give this to you.
this forum is so oblivious sometimes.
And somehow a lot of users are required to platform being meaninful.
Many growth/tech stocks are off by 10-40% from higher peaks or averages since the market went bananas in April & May 2020. Almost all growth/tech stocks are off by over 10% from late Oct or mid Nov.
Twitter as you stated with its run rate, will top $5B rev in 2021. The stock price opened at $45.5, $36.5B market cap. Twitter is off ~30% from most of 2021. Which is $65/share and a $52B market cap.
*Comparisons*: - Pinterest market cap is ~25% less. Not well monetized so far. ~$2.5B rev in 2021.
- Snap's market cap is more than double. Rev could hit $4B for 2021. So ~22% less.
- LinkedIn was acquired by Microsoft in 2016. Announced in June, completed December 2016. It was trading at a $17.5B market cap before acquisition. Rev for 2016 was $3.7B. This year the run rate has topped $10B. 2021 rev will top $11.5B. - For context, Twitter was worth $13B in June 2016 with $2.5B rev for 2016.
- Github was bought for $7.5B in stock. Announced and completed in June and Oct 2018. Microsoft shares were $99 in June 2018. They opened at $335 today. Those $7.5B acquisition shares are worth $25.5B today. - Gitlab, a partial competitor to Github, closed its 1st public day on Oct 14, 2021 above $15B. It's valued above $14B today. Annual run rate above $200M. - Gitlab has no overlap with Twitter. GitHub does with its social network and other trends. GitHub's valuation, whether under Microsoft now, or as a hypothetical public company, is likely 3x+ Gitlab. Or ~$45B. Github 2018 rev was likely above $300M. These numbers won't line up with Twitter because of both getting a lot of SaaS, subscription, and enterprise revenue.
- Telegram allegedly has been bank rolled by its founder since inception. I personally doubt this, but regardless, its bank roll has been limited. It didn't get the vast capital or marketing/namespace an SV company gets. Telegram's burn rate is lower than Twitter or any other company listed. Rumors say Telegram has turned down funding at a $30B valuation. Other rumors speak to a $30-50B IPO in 2023.
- LINE, a messaging app with some social network features, is based in and most popular in Japan. It was a subsidiary of Korean company, Naver. LINE went public a few years ago. It did a 50/50 merger with Softbank's Yahoo Japan. The combined company, Z Holdings, has a market cap of $45B. LINE is most popular in a couple of South East Asian countries and with expats.
- KakaoTalk, a messaging app with some social network features, is based in and most popular in Korea. It is much smaller than the others. 50M active users in 2021 with 90% in South Korea. KakaoTalk's parent company, Kakao, merged with Naver's competitor Daum with the current company called Kakao and valued at $45B. KakaoTalk only represents a fraction of this value.
It didn't lead to the stock market crash, but it always stuck me as the first time that the general public started to really think that the whole dot com scene was a little out of whack.
Twitter has a monopoly and 3B+ in revenue. It's hard to see how this justifies a 36B+ market cap. It's in a much better position than many, many other unicorns.
[1] I'm going off of a twenty two or twenty three year old memory, so I may have gotten the company wrong.
Ironically, they still have the same business model now - but with severe bloat (20k employees).
That's because the general public, and frankly even the non-general public, have never fully understood the digital computer: it's a leverage machine. It allows the exceptionally intelligent and/or insightful to leverage code to do what would have taken thousands, or even millions of workers to achieve.
That's why a billion dollar photo startup can be created by three people and sold to Facebook.
It looks like alchemy to the people without knowledge, because it's complex, difficult, requires a bit of luck (the right time / right place combination), and frankly, does require a certain level of intelligence that's well above average in order to fully exploit.
If you combine all of the different 'social media' platforms together into a single category? No.
Break news and sic mobs on people. Both activities many people are extremely interested in being a part of.
It enhances the experience on Twitter for those that desire more features: a thread feature (which is /really/ nice IMHO), ability to cancel tweets after send, more color themes and customizable icons, etc.
The Twitter "as we know it" will likely always remain free and ad-driven, but if you want an enhanced experience, you're going to have to pay for it. And that's fine by me.
The one issue is that chipping off existing features would cause major backlash. While removing low-quality replies and other spam is nice, it relies on even higher-quality moderation, to provide adequate incentive not to lose out on a purchase, but also to avoid regulatory issues, as this now becomes a product.
When it comes to adding features to sweeten the deal, however, there are very few that can really be added that provide a tangible benefit. The only feature I can think of is being able to edit tweets - or more accurately, embed a second tweet, similar to a quote-tweet, to provide an update. This would allow people to provide context, retract claims, or other uses, especially when a tweet gets attention or controversy, and could go a small way in reducing toxicity.
Google, Bing, and other search engines are ad-supported but, if they weren’t, I’d pay a lot for them in a blink of an eye.
Most media companies started with ad-supported websites and plenty of them successfully transitioned to paid subscription model.
And everybody moving at roughly the same time is probably an insurmountable coordination problem.
True, but they may leave microblogging behind altogether rather than pay. Twitter just isn't that valuable. Then again, I deleted my accounts four or five years ago.
If this were true we would not have a long long list of defunct once popular platforms where people used to be, but moved away from in mass after poor decisions by the platform operators.
To believe twitter is immune to the digg, myspace, etc effect is hubris not backed by reality
Digg was for nerds and nerd-adjacent people. Not sure why you'd even mention it in the same breath as Twitter.
Twitter's scale is so massive, the social graph so varied, that a true replacement is probably years away. It's not impossible for a competitor to take over, of course. Just unlikely.
But there are key differences. Twitter is used as a key communication channel for politicians, public officials, business executives, journalists, academics etc. all over the world. People’s careers and influence are built partly on their follower count and who those followers are. Key users post under their real name.
Digg and MySpace were very different from that.
I think this is over stated, Twitter is used to amplify, or bring attention to some announcment, event, or other communication but twitter itself is not the communication channel, it simply links to the communication channel which is often another platform (youtube as an example) or a website, or some other communication type.
Twitter is advertising, be it paid ads, or the "politicians, public officials, business executives, journalists, academics " advertising their own work directing people off twitter to consume more of that work
Personally I have found very little value and very little substantive communications coming out of twitter, in fact the only time I even visit twitter it is look at meme accounts not to find actual information or news
Funny how the people who don't use something always know all about it. (Science Twitter is not meme Twitter.)
Well if science is being conducted over twitter that goes along way to explain the terrible state of modern science...
Twitter doesn't have as connected a graph as e.g. Facebook. This lets a few hyperconnected users credibly threaten defection.
I don't think that's true, because they would charge for access and have ads. These are fairly rare.
>Google, Bing, and other search engines are ad-supported but, if they weren’t, I’d pay a lot for them in a blink of an eye.
Most people wouldn't or they would charge for access and increase their RoI. Search isn't really valuable to Google, they make most of their money in ads.
>plenty of them successfully transitioned to paid subscription model
That's not really true, you have massive consolation because their business model is nonviable any other way.
They make money from ads… which people see when they use search.
Ad-support allows for a much greater userbase which is a key ingredient to having a good search engine or a good social network. It doesn’t mean people wouldn’t pay a lot for those services if they were paywalled.
Of course if, say, Google charged for search, users could defect to Bing.
But the argument here is that Twitter’s users won’t defect anywhere. Its social graph is too valuable for them and a coordinated move somewhere else is borderline impossible.
EDIT: as a baseline, consider how many users are willing to pay for purchase/subscription to different Twitter apps. And that’s only a different (presumably better for the buyers) front end, not the core service.
This logic is backwards. Having a large userbase allows them to sell ads in the first place to the user base that won't pay for the service in the first place.
Pretty much every large tech website has a building phase where they make no money and sell no ads while building a user base large enough to start selling ads. None of the large web companies today have charged to use their product and at this point it's unlikely they could.
>But the argument here is that Twitter’s users won’t defect anywhere. Its social graph is too valuable for them and a coordinated move somewhere else is borderline impossible.
Which is a terrible argument written by someone who doesn't understand the market. It's like saying no one will move away from AIM in 1999. Yes, people will. There are lots of historical examples, including the Digg to Reddit exodus. Even Facebook itself has had the problem of users migrating away from Facebook. Facebook has literally bought companies where users have migrated to (Instagram/WhatsApp).
> EDIT: as a baseline, consider how many users are willing to pay for purchase/subscription to different Twitter apps.
Virtually none. No one was paying for TweetDeck and now it's part of Twitter. Consumers aren't using HootSuite or Sprout Social, they target businesses. Going down the Android list most Twitter apps are free, the few that cost anything have small install bases (Fenix 2 <100k purchases, Talon for Twitter is ~ 100k purchases). Twitter has an daily active users of over 300 million users. So maybe 0.1% are willing to pay a one time fee for a client? I don't think Twitter can do much with that.
Virtually no one,on a consumer level, is willing to pay for a messaging service. WhatsApp (one-to-one) is free, Facebook is free (broadcast), Instagram is free, Snapchat is free, YouTube is free, TikTok is free, Skype is free, Zoom is free (to individuals), Google Chat is free, SMS/MMS/RCS usage is free (depending on how you look at the service cost).
On a business level you can extract payments (think Slack), but on a consumer level, messaging has no value people are will to pay (so it's ad supported instead).
>and given that some of Twitter’s most hard core users use third-party Twitter clients, and thus aren’t monetizable, the revenue per addicted daily active user is even lower
I don't see how this must be true going forward, either by having a standard cost for open access to the API or through inclusion of twitter ads and metrics in the endpoint streams.
As pointed out they are just in the middle of re-opening the API developer ecosystem & it would be a shame to have this reversed by activist investors for the second time.
By the measure of “I can explain how they work in a blog post” none of these are complex. But trust me, operating internet scale services is complex, regardless of how simple they seem from the outside.
Twitter doesn’t cost $0 because no one thinks it’s worth paying for (demand side), it’s because if they did charge they’d be replaced by someone who didn’t (too much potential supply).
Even taking this assertion, it means there is effectively infinite supply so Twitter's service has effectively no monetary value to the consumer. It's still impossible to charge a consumer for it then (and the costs to provide the service have to be paid by a 3rd party in ads).
Edit: It's very difficult to build a network and get to a critical mass like Twitter. I'm still arguing it's demand constrained (people unwilling to pay) because you would see more viable competitors if it were supply.
this would be a good fit for large media sites (journalism twitter is huge), government, businesses. let them pay.
examples of this being expressed here by me:
It's not like there's anything all that complicated about the basic tech model of "loosely synchronized, eventually consistent live data feed algorithmically sorted with the ability to follow and group sources." Where these services earn their valuations is in sheer scale of the user base combined with the backend telemetry and machine learning services that drive user profiling and personalized ads, but government institutional use would not want or need those features. As far as I know, eChirp and Tapioca are maintained by volunteers and functionally equivalent to Twitter and Facebook if you stripped out the features built for serving personalized ads and maximizing reader engagement.
edit: Eugen, you can steal this business model from Twitter if they don't want to play in this space. Run Mastodon-as-a-service and sell it to institutional actors. I don't know who runs Masto.Host but they seem to be positioned to offer your software as a service to these groups.
There are other AP implementations that can be sold (as a service) to these large pocketed groups, not just your own software product.
another edit: this may leave a sour taste in your mouth but you now have a notable political user of your software, one that more than likely does not have the technical competence to be running it on their own. Someone could be making money off of them by providing a managed, white-labeled Mastodon instance (and then be responsible for scaling, security, availability, all the devops shit, etc). Not saying that should be you, but someone could.
There's value in managed services (security, keeping updates applied, uptime, scaling, etc etc)
If there's someone at Pixiv reading this and looking to pivot, I won't feel bad if you take this idea and run with it.
Journalists don't get value from Twitter?
Influencers and other business users don't get value from Twitter? Sports teams? Non-commercial entities?
I appreciate your insight but I disagree with your analysis.
So to respond to the original article by Ben Thompson, I don't think it makes sense to charge all users, but it does make a lot of sense to charge a subset of the users. People (companies) who use twitter for marketing for example.
However, I still believe it can be fixed. As an example, my consumption of news related information has moved significantly to Twitter. Why not do a better job there, in trying to provide a kick-ass way for content creators/consumers, and charge them for it.
Twitter is IMHO only a communication platform for celebrities and brands. This is <0.1% of the user base. For most people, your Tweets are even less noteworthy than Youtube comments.
What users use Twitter for seems to be three things:
1. As a de facto notifications platform;
2. As a news feed aggregator. This then means consuming content off platform; and
3. "Voting" on content you agree or disagree with. Ultimately this is what liking and retweeing really is: no different to liking a Youtube video. That's all it does.
Users are famously unwilling to part with even small sums of money for Internet services. Twitter seems no different here.
That's plenty to pay for hosting and even a few moderation cases per year. Cool, so they're fine!
People don't like to pay for stuff, and while surely Twitter has many users for whom $4 would be irrelevant, it's going to be a surprisingly small number - and - we've already established a price of $0 in people's minds for the service.
Charging $25/month for the blue check and a bunch of other pro services (including priority in feeds) might be some kind of opportunity.
Where the author is correct and also reasonable in being more generalized about it ... is the lack of a good Ad Program. That should be embarrassing. Twitter has enough data to be able to offer something approaching targeted, actionable Ads like Facebook. And I think they can do it in a reasonable way.
So twitter becomes a sort of neutral preview / public announcement forum, like a kiosk with folded newspapers on the street: you can see the headlines, but you need to buy to read.
Alternatively, they could do the same from scratch without twitter...
The problem is not what happens to twitter. The problem is how to have healthy, representative, inquisitive journalism
that centralization and processing of responses is by-and-large part of the social media problem (both generating the twitterstorm dynamic and having spawned the shadowy "sentiment" industry) but I suspect a lot of addicted users are quite keen to keep it going
Capitalize on the flame wars. Ya, it won't make the world a better place but does Twitter do that now?
Something like
0-100 followers : free
100-1,000: $5/mo
1,000-10,000: $20/mo
...
1M+ : $10,000/mo per 1M
The aligns the incentives and value provided. Someone having 1M followers on twitter has a powerful platform for their agenda whatever it may be. This should come at a progressively higher cost to them (not their followers).
It's like the ultimate DDOS opportunity- tell everyone to go follow <account you don't like> to drive up their costs to bankrupt them or force them off the platform. Create bot accounts to follow all the up-and-coming politicians of your opposition party or your startup's rival or the media company with a bias opposed to yours.
Then the arms-race component would kick off, and you'd have secondary accounts retweeting primary accounts to spread the followers over hundreds of alt accounts.
The fun part would be they'd have to place caps so hobby users didn't accidentally go viral and get lots of followers, which in turn would create scarcity for the users who follow the now capped account. Imagine someone bragging they're part of the elite 1,000 first followers of whatever random account is popular at that moment.
All of the large accounts will pay a reasonable fee.
I'd probably pay $10k/mo for my brand if it allowed me to talk to 1M people interested in my products as frequently as I wanted. How much would the same cost me on other platforms? A comparable business is something like mailchimp where you pay $300/mo to message just 10,000 contacts.
And yes, Twitter would need to get better at purging bots, but that is a good thing and a nice incentive to have.
Media and institutions have the budget to pay here.
Free-to-use is somewhere in between: the notable users get compensated with access to attention, and Twitter benefits from the attention-time of their audience.
So, the underlying point that I think you're making -- that notable users get a fantastic deal on social media at the expense of society -- is well taken.
Let's hope that a new mass communications technology emerges to disrupt this dynamic.
They had 3.7B in revenue last year. They're doing ok.
Make world happy again!
* Blue Check: Free, validate with 3rd party ID auth system
* Anonymous: $10/month
* Early access to tweets -- send an API call with Elon Musk's latest tweets 1000ms before they are public to algorithmic traders for $1M/month
* Blue checkmark next to profile pictures that OpenSea verifies you own
TL;DR Paywalls are for new services, not Twitter.