Recently Twitter announced they are launching a paid subscription service.
That's another feather in the long list of monetization issues the platform has faced since its inception.
With 292M monthly active users, It is a shockingly poor return of that massive traffic.
Compared to Facebook, that's 3 times less for the same monthly active users.
The Facebook team designed a sustainable monetization of the platforms via ads. From a business perspective, it is great work. Almost all companies struggle to monetize their platform efficiently, more often choosing poor monetization models.
Twitter has kept experimenting with new ways, which is commendable.
But paid model on a 'public' social media platform is never meant to succeed. When your entire game is built on user size, you want as low entry barrier as possible. A paid subscription is a huge hurdle. Twitter want customers now than users.
Different monetization strategies the platform is experimenting with are:
Twitter has been experimenting with newsletters which is great.
On the recent success of Substack and their $600+ million valuation, it is proof that the newsletter industry is booming. Companies sense there is money on the table as Facebook has entered the newsletter service as well in form of Bulletin.
As the creator economy is on the upsurge, Social media seem to be still finding the optimum method to pay original creators. Email channel due to relative familiarity of the medium and proven monetization models is a better bet, at least now.
Twitter users preference for reading and the strong presence of the tech and politics community over the platform, also seems like a reading monetisation model will compliment the audience.
However, Twitter focus seems to be integrating revue, an email service of twitter -- with their platform, which in my opinion is not an optimum strategy.
The major issue is: Why only revue?
Most of the users prefer different email service providers. So, this strategy leaves these users out which form the majority.
Twitter focus seems to be enabling one-click subscriptions from the Twitter profile itself however, the feature will only be available for revue users.
A simple platform functions visually represented below:
A generic flow over Twitter goes something like this: An individual interacts with his followers using tweets. Followers like the tweet, if the quality of tweets are good, followers check their profile out and then supposedly one-click subscriptions of revue comes into the picture.
My curiosity is, If a follower is checking the profile out, they can easily be directed to blogs/newsletters via links in the profile. From a conversion rate optimization point of view, I can see a benefit with less number of clicks being a factor but it is enough to propel the growth of users coming to revue?
Another point is, Why will an existing creator take the hassle of moving to another email marketing platform when it is known that the move results in a drop in open rates upto to 70% due to the adjustment period. (source)
Lastly, If a follower is interested enough to subscribe to the creator's newsletter, there is a greater chance the follower checking out his work over his website before subscribing.
My point is making a dedicated one-click subscription might be a good start but still many many questions remain and knowing twitter and their experiments which often fail, I am not sure the company's product managers have a clear idea of how to monetize newsletters sections, yet.
Twitter has been experimenting with audio in form of spaces.
On the success of clubhouse and Spotify, it is a good move.
However, the tech industry is still looking for solutions on audio from a discovery point of view.
Video has been found and getting optimized every day. However, audio is still finding its place on the screen.
Tic-Tok UI solved the same problem for videos when it was launched. Dominant video platforms like youtube and twitch were optimized for horizontal/landscape viewing which users prefer for longer videos.
Instagram and others were mainly photo/image dominant platforms. The demand for video was skyrocketing with high-speed mobile internet.
Tic-Tok came with a swipe up feature, vertical full-screen UI which was the solution to easy, pain-free mobile video consumption.
Also, Audio already lacks visual stimulation. In an era, where there is high demand for idle-entertainment where you're are stimulated not only emotionally but visually as well. Audio leaves a huge part to the imagination. It is this reason why audio apart from music and radio, never picked up in previous decades even when relatively decent speed internet was available.
One possible solution for the lack of visual stimulation is subtitles.
They are helpful and I can see non-native, bilingual users consuming such content. With AI, generating auto-subtitles are ready-made solutions. How it is implemented on live features like spaces are yet to be figured out though.
Another issue that remains is on how to place the audio feature in Twitter feed.
As you can see, Audio has too many unknowns for twitter to figure out. Else much like great launch, clubhouse DAU are going down, Twitter might be in for similar trend.
A quick attempt at redesigning my Twitter feed to accommodate audio is below:
How they monetize spaces will be interesting. Spotify did it with audio but music makes the majority of their revenue and Podcast has been catching up.
The podcast might be where Twitter can niche down.
Tips and subscription system
Twitter has been experimenting with a model similar to platforms like Patreon in Super follows.
A proven model that might work but is it optimum for a platform where public access of content is the main sell?
Platforms like Patreon and Only fans offers a dedicated platform for subscription type content. Tipping and paid access make for major functions.
Such functions are not native to Twitter. The result of which might result in general users feeling abandoned.
Another point can be how Twitter is viewing itself in the mid-long term?
Does Twitter view itself more like Facebook, a leader on the internet for open discussion and digital footprint or more niche platforms like Patreon and Only Fans where subscription is sold for access to private work.
Also, Existing creators already have established workflows across different platforms working in sync with each other. Twitter might offer a whole experience from newsletter to private subscription services yet it still requires sync across different web services.
Unless all could be done via few clicks, it might result in a hard sell.
Combine it with twitter's habit of ditching failed experiments, it is a risk on the creator's part to put all eggs in one basket.
Another issue is, Banning of accounts.
How is Twitter going to address the grey area? Twitter is already notorious for banning influential accounts.
Creators are aware how having an audience over public platforms are the grace of these platforms & any break in terms and conditions results in the deletion of the account. Hence owning an audience via emails are preferred.
An alternative solution can be focusing on b2b companies. Charging the companies via public API and giving incentives like revenue share. More such solutions should be explored as companies are more likely to pay than a user.
Another opportunity where Twitter can optimize the platform's monetization options is via UI redesign.
Altering the home page feed can be tricky. Home feed defines Twitter 'feel'.
An easier option can be allowing profile design to accommodate highlights, important links etc of a particular user.
Not only will this allow more encouragement on click-through-ratio which Twitter users are notorious for but also, more opportunities for paid ads.
Tumblr can be a great case study when it came to home screen design. One of the platforms main reasons for success was how the users were able to design their homepage. The tag and reblog system made it incredibly convenient to discover other highly specific things you were into, and the customisable UI made it comfortable to browse.
But then Tumblr shot themselves in the foot when they couldn't figure out a better monetization strategy. So much so, their poor attempt to monetize the platform killed the company.
On records, it was valued at 1.1 billion by Yahoo in 2014. Due to series of poor modernization decisions resulted in the company's valuation plummeting to 3 million in 2019.
Twitter audience constitute 80% Gen Y audience.
This is the most well-paid section of society so the huge potential is there. Apparel ads and other generic category-based ads on gender, demographics and behaviour should work in theory.
However, Twitter is notorious for giving a poor click-through rate along with a worse conversion rate.
Twitter issue seems to be not understanding the user behaviour.
For comparison, Facebook knows how to make users learn new features.
First, they did it with Instagram stories.
Then repeated it with reels.
There seems like Facebook has a defined process of introducing new UI features which users 'learn' naturally. But twitter seems to have failed spectacularly with any major UI changes.
For ex: Fleets. No one used them. They killed the feature in 6 months. This is contrasting compared to Instagram where 70% of active users use stories in some capacity.
As a public platform, opportunities are huge. They just need to be directed in a transactional way.
The strategy needs to be put in where how the platform could help the business without killing the mood of the audience.
Rivals have done it and are thriving.
There also lies a grim reality in Tumblr's failure to do so. It leads to slow painful death.
With rising political conflicts and bold decision to ban major political icons -- Twitter already seems to take bites that they are not able to chew.
India recently threatened to ban the app if the company failed to comply with rules. And this is no one-off incident.
Germany and many other nations have been critical of the platforms function.
Twitter's pivoting trait has kept them in green but heavy optimization is needed if they aim to catch Facebook rather than playing survival game of 'small' companies.
Until next time,
Ps: I am available for hire as a growth product manager. To contact, please email me at firstname.lastname@example.org