Twitter Considers New Strategies for More Revenue Streams

The majority of Twitter’s revenue comes from targeted advertising, but the company is now developing a subscription product that it has considered for years to create a new revenue stream. According to eMarketer, Twitter’s portion of the global digital ad market remains at 0.8 percent and has grown at a slower pace than those of Facebook and Snap. Its U.S. user base has also leveled off. The COVID-19 pandemic and pressure from investors to drive growth are other factors influencing Twitter’s decision to move forward.

Bloomberg reports that, “a number of Twitter teams are researching subscription offerings, including one using the code name ‘Rogue One,’ according to people familiar with the effort.” Other ideas under consideration are “the ability for users to pay the people they follow for exclusive content … charging for the use of services like TweetDeck or advanced user features like ‘undo send’ or profile-customization options.”

Twitter chief financial officer Ned Segal added that, “a subscription option of some kind would offer sales ‘durability,’ and recurring revenue is more consistent than advertising spending” although he said that Twitter is in the “very, very early” stage of exploring this idea. “We have a really high bar for when we would ask consumers to pay for aspects of Twitter,” he said.

With regard to users paying the people they follow for exclusive content, Twitter tested this “tipping” strategy with Periscope. In this model, “Twitter would take a cut of the transactions.” The company is thinking of rolling the free TweetDeck, “a dashboard useful for viewing multiple feeds and overseeing different accounts,” into a “suite of services.” Twitter is also considering charging for TweetDeck, which so-called power users rely on.

Additional features could include an ad-free feed, “offering users the ability to buy their way out of targeted advertisements and data collection.” Paying for exclusive content is another possibility; Twitter just purchased Revue, a newsletter startup, which could play into this path.

Other ideas mentioned include higher-quality video, verification (which is unlikely to gain traction as a fee-based service), more and specific analytics, and consumer features such as “custom colors, hashtags or stickers for user profiles and posts.”

Bloomberg complied data from analysts showing that, for Q4, Twitter’s “revenue rose 18 percent from a year earlier to $1.19 billion, with profit estimated to come in at 30 cents a share.” Twitter head of revenue products Bruce Falck noted that, “increasing revenue durability is our top company objective … [which] may include” subscriptions. He added that the company does not expect “any meaningful revenue attributable to these opportunities in 2021.”

Twitter Adds Users Through Trump Ban, The Wall Street Journal, 2/9/21
Twitter CFO Ned Segal Confirms Donald Trump Cannot Return to Platform, Newsweek, 2/10/21
Twitter’s Jack Dorsey Wants to Build an App Store for Social Media Algorithms, The Verge, 2/9/21

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