Twitter’s subscription model is becoming more precise

Twitter As a witness to the transformation taking place in Silicon Valley and with it the global digital platforms. This second post considers the first changes made by its highly-announced new boss, Elon Musk.

In the first post, two months ago, GreenSI He noted that Twitter, which we have known since its launch in 2005, is dead.

While all social networks are funded by ultra-targeted advertising and the exploitation of personal data, Twitter has not found its balance. Very late !
This economic model is now being challenged from all sides. Job cuts in Silicon Valley in anticipation of the global crisis and the disruption of models by AI echo Twitter’s drastic layoffs (halve the workforce).

And yet, two months after Elon Musk’s “muscular” takeover, when many predicted it would end quickly, the platform is still turning around and growing. GreenSI always believes in his ability Twitter To return and evolve with the future models of Silicon Valley.

One of these models is subscription based on granting privileges to a subset of users in exchange for a monthly subscription. The first attempt was made to suggest having a “certified account” (Twitter Blue) with a recognition token on the profile. It only had the “certified” name because anyone could buy it. So, It’s a subscription closer to Amazon’s “Prime” for being a featured user than the old verified account., intended for famous people, officials or journalists. Confusion still lingers in some minds, but Twitter has turned the page.

As we suspected, this was only the first step, as Elon Musk just announced this week, a future subscription that will allow you to no longer have ads. The price should be higher.

Here we find the model netflix It began streaming into the ad-filled world of American television (there might be a commercial break every five minutes!). This is interesting to note netflix will also develop the model, but on the contrary, lowering the price if you want advertising.

So that Twitterwhom netflix, they want to balance their revenue between paid subscriptions and ad-funded free access. According to Elon Musk, in 2022 the turnover will decrease by more than 40% to 3 billion dollars. This allows us to estimate that Twitter’s target size for follower revenue is between 20% and 30% after reinstating some ads. Indeed, 2022 revenue was affected by the departure of some key advertisers who did not appreciate the shift to greater freedom of expression, particularly people who were previously banned from the social network.

This “new” Twitter model is the popular “freemium” model! Developed in the 2010s and referenced in a journal article Harvard Business Review10 years ago (!), by Vineet Kumar (“Making Freemium Work”).

In this model, the subscriber curve is attractive to a small portion (“early adopters”) at the beginning, not immediately with the offer, but with its evolution over time. So now it’s the news flow to watch on Twitter that will determine whether Elon Musk wins his bet. New features that should convince you to subscribe.

to return Amazon, early adopters of Prime wanted to save on shipping costs and have better service. Quitting Prime today means giving up, among other things, a video-on-demand service as rich as its competitors or unlimited photo storage.

Facebook is another social media player in the midst of a forced turnaround as its share price has nearly tripled since mid-2021. Facebookit happened Meta, the trajectory of its evolution, is presented as the creation of a virtual universe (Metaverse). It aims to develop an economic model with the sale of equipment (3D), valuation of its users’ assets (NFT) and commission on virtual transactions (crypto). It may also charge access to certain “privileged” parts of Horizon World, equivalent to a subscription to the Freemium model.

GreenSI as mentioned in several posts, he doesn’t believe it yet, but he shows it The entirely advertising-funded social network model is surely doomed. Fragmentation of the Global Internet; if we compare speeds, rules or freedoms; continues (USA, Europe, China, Russia, etc.) and divides the potential of networks previously integrated into GAFA assessments. Adaptation to every context, even tomorrow every country that wants more sovereignty over the data of its citizens, will no longer allow economies of scale in technical platforms. Less income, more expenses…

Alone apple It looks like what Meta sees in his virtual universe, which could re-energize 3D, virtual universes, and perhaps even “post-Tik-Tok and Instagram” ways of exchange. Like what happened with iPhones with smartphones.

apple From the beginning, it has a model around the percentage of hardware and software transactions sold in its closed universe. The evolution of economic models of social networks has little effect on this. Instead, subscriptions can contribute to evolution by bringing the value of their brand into personal spaces. Its virtual reality headset is lagging behind, but is still slated for later in the year. This is a signal to watch to see if virtual universes take off, as other manufacturers’ sales are not.

Therefore, Twitter has two years ahead of it with its social sharing model and the Freemium economic model as we know it. These models may be changed by future collaborative virtual universes, but they won’t show their faces right away, and the disruption brought about by generative AI is more likely to be there sooner.

Finally, the subscription champion still remains Amazon. He doesn’t publish his numbers, but nevertheless, he stated that he was 200 million paid Prime members worldwide by the end of 2020. This is roughly the number of Twitter users (as of April 2022, it was 229 million, but inactive accounts have since been purged). for GreenSI This is definitely the model of inspiration that the Twitter boss had in mind.

Now let’s wait for the new features. The recent ban on external apps using its APIs is a sign that Twitter wants to maintain control over it, as its model depends on it.