Photo credit: Claudio Schwarz
Twitter may be working on a subscription fee product with advanced features for those who want them.
A Bloomberg report suggests that Twitter hopes to move away from its advertising model. The impact of that model peaked during the pandemic, when most brands practically stopped spending on advertising. Most of Twitter’s revenue comes from targeted advertising, which delivers promoted posts to interested users.
However, Twitter hasn’t mastered serving those targeted ads as well as Facebook or Snapchat. EMarketer reports that Twitter’s share of the digital ad market stands at just 0.8%. By diversifying and introducing a subscription fee, Twitter can diversify its income stream. The idea is not too far-fetched, as many social media marketers already pay for third-party services to manage their feeds.
Bloomberg reports that Twitter is investigating various subscription offers under the codename “Rogue One.” One idea that is being considered is the virtual tip for exclusive content. It would work similar to Twitch Bits or Patreon, where users can pay to receive exclusive content from users.
Other ways Twitter is experimenting with the subscription model include charging for Tweetdeck or advanced features such as ‘undo send’. Profile customization options are also being considered. Twitter’s CFO Ned Segal believes that the subscription option offers Twitter “durability” with reliable recurring revenue.
“We have a very high bar to ask consumers to pay for aspects of Twitter,” Segal told investors last July. At the time, Twitter mentioned that it was in the early days of exploring possible subscription options. Subscriptions have been a talking point for your quarterly financial calls for two periods.
“Increasing the durability of revenue is our main business goal,” Bruce Falck, Twitter’s chief revenue officer, told investors, which may include introducing a subscription model. “While we are excited about this potential, it is important to note that we are still in a very early exploration phase and do not expect significant revenue attributable to these opportunities in 2021.”
Twitter has also been collecting data from its users on what features they would like to pay children for. A survey conducted on the social media platform last year suggested ‘tips’ as a possible feature. You tested the model with Periscope, but that feature will be closing soon. (Remember, Twitter shut down Vine in 2015 before TikTok took off.)
Analysts believe that the subscription fee will be welcomed by Twitter loyalists, but I’m not so sure. The service has traditionally been free for more than a decade in operation. People probably won’t shell out just ad-free Twitter, but they can pay for exclusive features, similar to Twitch and Reddit.
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