A Possible Solution to Twitter's Revenue and Spam Problems | Hacker News Reader

A Possible Solution to Twitter's Revenue and Spam Problems

blog.zachwaugh.com

27 pointsshashashasha30 comments

Here's a stupid idea: let people buy "badges" that appear next to their name. Kind of like "verified", but to show support for their favourite celebrity/band/whatever. There are some pretty intense fanbases on Twitter.

That's a better idea than turning Twitter into Quora.

Either way Twitter needs to stat thinking about new features. They need to start to look past the MVP of 140 Characters and build out new and exciting features.

What that shows is how hard twitter's revenue problem really is.

To justify a $10 billion valuation on the public markets (not the bubble of SV), they'd need to pull in $500 million of earnings. (Google's P/E is 19, let's assume something similar).

$500 million is EARNINGS - e.g.: revenue minus expenses.

So, $14 million is just a drop in the bucket, they need to do something far more ambitious than this plan to justify their valuation

Does Twitter have a revenue problem or are people angry that they weren't consulted on how Twitter is making revenue?

I dislike ads in my stream and bad developer relations too. But the fact is they're making revenue. That's cool.

The blowback is that they keep clamping down on their API in a misguided attempt to keep Tweets exclusively on Twitter’s properties so that more people can be shown more ads.

No one has a problem with Twitter showing ads, but reducing access to our own tweets and behaving less like a neutral platform are moves that irk a lot of us.

Thoughts from late 2010: http://alanhogan.com/twitter-betrayal

And of course the whole app.net saga was somewhat motivated by these moves.

i think not misguided.

they pay very large bills to make their platform work and people who use the API to make alternative clients are benefiting from this without paying.

No wonder Twitter is cutting them off.

Overall it is a dangerous choice to build a system based on a free API.

It’s not just alternative clients. It’s LinkedIn, Instagram, various value-add specific tools… stay tuned, it’s only getting worse.

What about the pseudo-anonymous accounts that would suffer from having a real, subpoenable, credit card attached to them?

Here's an idea that's only partially a joke: segment the user-base by yearly membership fees. Have the free tier, $10/year, $100/year and $1000/year. All tiers are 100% quarantined from each other.

There's upsides for Twitter: when 90% of my friends get the $100 plan there's a huge incentive for me to do the same. When all of my friends keep the free plan then there's no incentive for a loser like me to pollute the higher Twitter echelons.

Might be some tricky cases where I follow a celebrity who has the $1000 plan.

I know these ideas sound ridiculous. However considering the mainstream nature of these services and peoples' insatiable appetite for competition and one-upping each other it could work out. The prices for each tier would probably need some iteration to get closer to some global maximum.

Also I wonder if this could work for Facebook?

I don't think it's that tricky... instead of quarantine, make it like direct messaging: whoever pays more must opt-in to hear those paying less.

Very interesting idea. Might have some merit with a lot of tweaking.

But appeal to exclusivity and FOMO are often value drivers.

On the other hand, if 90% of my friends sign up for the $1000/year plan, and I cannot afford that, they just lost a user.

Would the people willing to pay a high amount make up for the loss of the lower-tier levels? (Keep in mind that this is the kind of decision that you cannot ctrl-z out of.)

Good question. I wonder what a good strategy would be for figuring out the near optimal pricing plan? The strategy would need to start off w/o painting yourself into a corner. In other words the initial pricing can't constrain future pricing adjustments by much. Also you'd want a strategy that allows for frequent adjustment down the road. Something like the Google "search algorithm" frequent tweaking.

Perhaps an increasing sequence of additional tiers could work? Start with just free. Then free or $10. Then free or $10 or $25 and so on. This avoids users feeling like they've been punished for being an early-adopter. Also users who aren't happy with their current tier can simply upgrade.

This is similar to a strategy to prevent email spam. Sender pays the Receiver 5 cents for each email they send, unless the Receiver has the sender in their address book.

The Receiver can also after reading a message from a new email, choose to waive the 5 cents.

Although this is cool. I doubt there will be traction as 15m revenue is no where close to their neccesary targets. As app.net is doing. Twitter needs to gen at least $5 to $10 per active user per year

$14 million/year is of little consequence to Twitter in the big scheme of things.

I don't think it's good idea, if celebs have premium accounts that means that nobody can mention him/her? that's kinda stupid

Celebs wouldn't need premium accounts, they already have verified accounts. Except in the most superficial of cases Twitter is a one way communication tool for celebs, they talk we listen, it's a different tool for them than for us the unwashed masses. Celebs that don't have PR flacks manage their Twitter accounts probably have mention blindness the way we have banner blindness.

didn't know that, thanks for the info!

This is an intriguing idea, but I see two fundamental problems:

1) Isolation through cliques can be a bit of a double-edged sword. While the prospect of being able to battle spam (and a wave of unsolicited mentions) is probably immensely appealing to the 1%, altering the fundamental contract on which the protocol is based is almost always a bad idea.

2) Even if this accounts for a non-trivial fraction of overall revenue, they aren't going to stop pursuing advertising dollars. Which means that they still need to own the stream. And that the third party client massacre will, therefore, continue unabated.

> free users cannot @-mention paid users

Whoa, not cool.

It's an unlisted phone number except people can't even call you if you give it to them!

This should be an option that could be turned off if the premium user wishes..

It should also be set that if the premium user is following the free user the mention would go through normally.

There goes any incentive for a company to set up a twitter account to interact with their customers who don't want to pony up the yearly fee.

I like being able to tweet @some_company and get a faster response than I would by filing a ticket.

I dont't know if it's a stupid idea or how much they could make with it, but I've always thought it was an obvious business model to charge people who reach a certain level of followers (say 1.000). They're clearly benefiting from having a Twitter audience. And of course, charge more as the number of followers goes up. If you dont upgrade, no more people can follow you.

The problem is that Twitter needs those users. A user with a ton of followers is a hit: Twitter shows those followers to people who sign up and don't know what to do. This is not the only hole in this idea btw.

By the way, I'm sure this thread will be filled with suggested business models by people who have thought about it for five minutes, without knowing any of Twitter's metrics. There are really good reasons why Twitter gave up and went with ads.

The thing is, nowadays, do you think any celebrity that frequently uses Twitter would stop because they have to pay $1,000/year (or way more)? They know it's a huge promotion channel for them. It may have been a bad idea in the beginning, but now Twitter's huge.

Just run the numbers. For one, there are approximately 3M people with 1k followers or more. If they charged an average of $5/month, many (most) would simply not pay. A significant number of those people are international. Many of them did not even try to get followers. Even if all of them paid, $200m/year does not come close to justifying Twitter's valuation.

Trust me on this, Twitter doesn't want to mess with the head of the distribution. The backlash would be terrible, and it would destabilize their ecosystem.

The problem with this model is that you harm both the followed and potential followers if the user doesn't upgrade.

Twitter's value (to everyone involved) is in its network effects, damaging that by adding a paywall just brings net value of the service down.

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