Twitter is looking to create more stakeholder value by moving to a subscription model and reducing dependence on Ad revenues.

Gryphon — Twitter’s subscription platform

What would it take for Twitter to get the subscription model right?

Photo by Ravi Sharma on Unsplash

As evidenced by the recent job postings and the announcement to the Shareholders, Twitter is considering the subscription model. The internal code name for this project is “Gryphon”. The Twitter investor relations handle tweeted out :

“We’re also in early stages of exploring add’l potential revenue products that complement our advertising business, which may include subscriptions & others. It is very early; we do not expect any revenue against these in 2020.”

CEO Jack Dorsey mentioned on the recent earnings call that “you will likely see some tests this year” of different approaches. He added that :

“…a really high bar for when we would ask consumers to pay for aspects of Twitter….We want to make sure any new line of revenue is complementary to our advertising business.”

Currently, Twitter, like other social networks, has provided a free service and has relied on ads targeting its users as the primary source of income.

Even though Twitter hasn’t confirmed the exact nature of the subscription model, the benefits of such a model could be:-

  1. Having to pay for tweeting may minimize the threat posed by Twitter Bots.
  2. Twitter could create a subscription around content curation and monetize it and give Substack and medium a run for the money.
  3. Additional revenue stream besides Ads and data licensing, which could help strengthen the financial situation of Twitter.
  4. Unlock shareholder value and empower Twitter to reduce abuse on the platform by reducing their dependence on ad revenue.

Some of the things Twitter will have to focus on to make sure it gets it right include:-

  1. Invest in creating the culture of subscription with its users.
  2. Focus on personalization through customization and flexibility and hence focus more on subscribers than the product.
  3. Identify the right metrics to measure themselves.
  4. Figure out the appropriate freemium model so that it is in service of the broader business strategy and ensures network effects are sustained.
  5. Explore the gamification approach.
  6. Iterate till the get the pricing model right.
  7. Offer better quality

Whatever Twitter comes up with it will be interesting to see its evolution to a subscription model and how it’s received by the Twitterati.

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