Subscription-based Twitter — What Would It Mean?
The social media landscape is lead by the well-known Facebook, Instagram, Snapchat, Twitter and Linkedin. Some of them (FB) have more monthly active users (2.45B) than some countries or even continents have habitants (Europe — 740M).
This is an overwhelming number and there’s no doubt regarding how embedded in our lives social media is. It is our second home where we spend 2 hours and 20 minutes per day, on average.
The business model of these companies is based on monetizing users attention and their data.
The operating model of these companies is a flop, at least at the eyes of the user. We think they exist to enable human connections, to find that lost friend from high-school or to communicate with our lover overseas. But instead, they are using us for channeling ads.
This is a fairly good revenue stream for those companies. Having an extra large audience with individuals from different backgrounds, interests and hobbies, that are in need for content, makes them the largest Marketplace of Time. This time is used to channel mesmerizing ads directly targeted at the right audience for greater engagement.
“If you are not paying for it, you’re not the customer; you’re the product being sold.” Andrew Lewis
The advertising-based business model works perfectly:
- Facebook: 98,5% — $69,655 billion
- Instagram: $20 billion (integrated on Facebook’s revenue)
- Snapchat: 98% — $1,67 billion
- Twitter: 86,5% — $3 billion
- Linkedin: 65% — $960 million (2016)
(% of total revenue coming from ad sales)
The problem is not only the time we spend consuming product info but also our exposure to wrong and malicious messages. (Un)consciously we are targets of misinformation, fake news and damaging texts and videos that help spread ideas promoted by not so well intended people. The ones who pay for ads, have a voice in this media channels. And more than ever they can reach an overwhelmingly large audience.
One Way To Solve the Problem? Subscriptions!
A subscription model is beneficial when looking from different perspectives. Every stakeholder gravitating around a social media company gets positive outcomes from this change.
The Company can finally dedicate itself 100% to their mission — promote networking, human interactions and fruitful sharing of ideas. A subscription-based model would eradicate a large portion of misinformation and hate speech spread by trolls and bots — and other more well-known personalities. Putting users behind a pay wall would demotivate the majority of evildoers and it would generate a more healthy, comfortable and collaborative virtual environment, attracting more users.
The Investors would find a paradise of recurring revenue. This model allows to feel the pulse of users, understand their willingness to strengten or losen their link to the company. A subscription-based model turns revenue more predictable and allows shareholders to have more visibility and build confidence in future earnings. This could mean driving stock prices up!
The Users would find a more trustworthy, clean and constructive place to discuss and share. As seen on Medium, a small investment can give us access to leaders, politicians, engineers, designers, freelancers, novelists… willing to share their points of view, knowledge and experience. Everyone is free to share and no one is surprised by an hidden ad or a punching notification.
This could mean an important change for Twitter but also for all social media sector as this model shows already some potential.
Instead of being a marketing and advertising platform, Twitter could reinforce its position as a comfortable space for sharing ideas and generate constructive discussions. This would make them a company with a different value proposition and could potentially make them the leading social network.
Practical hint: Scott Galloway is thought leader with a strong opinion on this topic and he suggests a paying model based on the number of followers. The bigger the audience, the bigger the bill. Who knows…