Can Twitter Blue become a significant income stream for Twitter 2.0? Will subscriptions be the future of social media, as Elon Musk has predicted?

Right now, it seems that Musk’s early hopes of generating 50% of Twitter’s revenue from subscriptions is well off the mark – but maybe, it’s early days, and eventually, with enough incentives, more people will pay to use the app.

At the same time, maybe that doesn’t even matter anymore, with an ad industry veteran coming on as CEO?

Maybe, now, Twitter’s strategic approach on this front is starting to shift.

To recap, back in November, shortly after taking over the company, Elon Musk laid out his vision for the future of the app, which, among other elements, included Musk’s plan to get subscriptions to account for 50% of Twitter’s total revenue at some stage.

Which is an ambitious goal – though ambitious goals do also seem to be Elon’s specialty.

In pure dollar terms, Twitter’s Q2 2022 revenue – its last performance update before Musk took over at the app – was $1.18 billion, which would mean that Elon’s plan would eventually see Twitter generating $590 million per quarter from subscriptions. If that’s based on Twitter Blue purchases alone, that would require around 24 million users signing up to pay Elon and Co. $8 per month for a blue tick.

Thus far, around 663,000 people have opted to pay for Twitter Blue.

So it’s a long way off – but Twitter also has its Verification for Organizations program, at $1,000 per month, to help make up the shortfall, along with creator subscriptions, which Twitter doesn’t take a cut of yet, but will sometime in future.

So there is more to it – though even with these elements factored in, it’ll still be a big reach to get Twitter’s subscription income to that $590m target figure.

It’s still technically possible, and Elon and Co. continue to add more incentives to Twitter Blue to lure more subscribers. But it doesn’t seem like this is going to play out as Musk had, at least initially, hoped.

Does that mean that Twitter Blue is a failure?

Far from it – an extra $15.9 million from Twitter Blue per quarter is obviously significant, and will help Twitter counter the losses in ad spend that it’s seeing as a result of Musk’s changes at the app. But it won’t provide Elon with the freedom that he was aiming for, in regards to reducing Twitter’s reliance on ad dollars, and thus making it less beholden to stringent brand safety requirements.

It seems unlikely that subscription revenue is going make up even a tenth of Twitter’s overall intake, but it is a revenue stream nonetheless, and over time it could evolve into a bigger element in Twitter’s financial makeup. But as noted, with ad industry exec Linda Yaccarino coming on as Twitter CEO shortly, it does also seem like Musk is waving the white flag somewhat on this front, and conceding that his early plan for Twitter Blue isn’t going to play out as hoped.

Yaccarino will no doubt be tasked with re-building Twitter’s ad business, and re-establishing connections, which will inevitably also include more brand safety controls and considerations. Musk remains committed to free speech, and is unlikely to yield much on that front very easily, but it’ll be interesting to see if Yaccarino is forced to make some more concessions here, in order to address advertiser concerns about ad placement.

But where does that leave Twitter Blue? Well, it also seems unlikely that Elon will be taking a backwards step on this, and reinstating the old verification process. I do think that it’s in Twitter’s interests to verify the profiles of high-profile identities that are likely to be subject to impersonation, whether they pay or not, but that’ll likely have to go hand-in-hand with its paid verification process, which Musk continues to claim is about battling spammers and scammers, and not about the money so much.

But if that were true, Musk could offer verification for free, and a heap of people would verify their details in the app, which would really squeeze out bot traffic. But as Musk has noted, Twitter has to make money somehow, which is why the messaging around paid verification has been convoluted somewhat.

Of course, Meta has also copied Twitter’s approach, in an effort to rake in some quick cash, which adds extra weight to Musk’s strategic thinking here. But both offerings undermine the value that they now purport to sell, and neither is going to end up being a big part of the overall platform ecosystem, unless the companies lock down usage entirely for non-paying members.

That would have significant impacts on ad spend, which remains the big winner, and it seems impossible that either organization would risk losing such a significant chunk of their audience by forcing users to pay.

We’ll have to wait and see what Verification for Organizations brings, along with creator subscriptions, but all of these elements look set to become a lesser consideration over time, which, really, are doing more harm than good. At least, until Twitter evens out the process by adding in verification for high-profile users alongside paid members – but as a singular project, based on its initial stated aims, it’s unlikely to reach the lofty targets originally set.





Source link

ENGRMKS & CO – #Whats #Future #Twitter #Blue #CEO #App

Published: 2023-05-22 01:16:06 ,

Leave a Reply

Your email address will not be published. Required fields are marked *