Twitter considers subscription fee for tweetdeck, unique content
Twitter Inc. is building a subscription product as a way
to ease its dependence on advertising – a plan the social network has
considered for years, and one that has taken on a heightened priority given the
pandemic and pressure from activist investors to accelerate growth.
The majority of Twitter’s revenue comes from targeted advertising,
which serves up promoted posts aimed at specific groups of users. That business
has grown in recent years at a slower pace than competitors like Facebook Inc.
and Snap Inc., and Twitter’s slice of the digital ad market globally remains at
at a lackluster 0.8%, according to EMarketer.
Twitter, the thinking goes, would benefit from a separate revenue
stream that isn’t as reliant on brand advertising. The company’s user base in
the U.S., its most valuable market, has also started to plateau, meaning it
can’t rely on simply adding users to juice revenue.
To explore potential options outside ad sales, a number of Twitter teams are
researching subscription offerings, including one using the code name “Rogue
One,” according to people familiar with the effort. At least one idea being
considered is related to “tipping,” or the ability for users to pay the people
they follow for exclusive content, said the people, who asked not to be named
because the discussions are internal. Other possible ways to generate recurring
revenue include charging for the use of services like Tweetdeck or advanced
user features like “undo send” or profile-customization options.
Subscriptions have always offered a tantalizing alternative to
advertising, but social networks have traditionally stayed free as a way to
encourage user growth and engagement, which is then subsidized with paid marketing
posts. Still, Twitter Chief
Financial Officer Ned Segal said on a call with investors last year that a
subscription option of some kind would offer sales “durability,” and recurring
revenue is more consistent than advertising spending. Segal cautioned in July
that Twitter was not only “very, very early” in exploring a subscription
service, but also planned to be picky about how it goes forward. “We have a
really high bar for when we would ask consumers to pay for aspects of Twitter,”
he said.
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