By Charles Jaja-Sackey
Twitter’s $8 per month subscription revenue structure is suboptimal. It doesn’t matter if Elon Musk owns it, or what he’s achieved before. Based on the information about what this subscription offers, its as whimsical as they come.
Where did this $8 per month come from? I’ll tell you. Writer Stephen King tweeted he wasn’t going to pay the initial $20/mo proposed, Elon replied “how about $8?” And that’s where we got the price. Off of a reply.
Before Elon’s fans claim maybe he was being tactical, let me address that with some facts.
First, Twitter has the least number of active users compared to competitors. Second, It has one of the lowest average revenue per user ~$10 (FB at ~$31 for reference). Third Twitter struggles in major influence, forget the hype of “vawulence” or “digital town square” claim it’s attributed to, Twitter hasn’t been able to grow active users.
One of the ways to assess whether a social network is increasingly influential is to look at the ad trends. Ad market cost-per-clicks (cpc) are up overall, but the ad growth rate on Twitter is slowing, especially with advertisers preferring other networks.
I’m not going to go into the technical aspects of cpc but generally, if you’re getting more users, then more advertisers will enter the fray and the bid for clicks goes up. We’re seeing this in the markets but it’s not the case on Twitter.
More importantly, these other networks that are pulling the ad revenues from Twitter are also pulling creators. More on this later.
In my opinion, what’s happened here is the new boss of Twitter has looked at this and said, well just do a subscription! But consider this – what’s a meaningful subscription business? If you consider the subscriptions you have, how are they structured?
Netflix, Prime, Disney+, YouTube Premium, Spotify, OF, Apple+… they serve YOU media/visual content. LinkedIn serves YOU premium job postings… even Canva serves YOU creator tools. When have you ever spent time writing texts back and forth on a subscription platform?
Twitter wants a path to billions in annual revenue, and presumably they think they can make it through subscriptions because “most Twitter users would want to be verified…”
That assumption is unfounded. There’s a structured study that carried out sampling around 20,000 respondents, and relative to other features, verification is just not that valuable. Not enough premium users care about verification.
Even if they throw other features in as part of the subscription, there’s a “willingness to pay” study from 25,000 general users looking at major features Twitter Blue could include, the main interests was in Privacy, Ad limitations, and even Follower Boosting but these didn’t move the needle by much either.
Another key point to note is that people see verification as clout, not as a utility. And maybe it’s good that Elon is trying to change it, but then it’s not worth $8/mo. The sweet spot for that is $10-$20 per year. Not many people would pay $8/mo to keep reminding folks they’re the same person. Or that you can see their comments first.
Even if the claim is that people would pay, yes they would but not in the volume that’s hoped for. There are currently less than ~500k verified accounts on Twitter. Assuming that number grows 3x = 1.5m @ $96 per year. You’re only around $144m/year. A far cry from the $1.4bn Elon claims Twitter loses every year.
Finally, most people who talk about “creator revenue” haven’t really explored what this entails. Twitter does not offer creator tools; it can’t offer creator tools in a manner that’ll drive creator engagement as say TikTok, YouTube or Reels. It’s mainly text-based. If it wants to pay creators, it’ll need to overhaul its business, meaning it won’t be Twitter anymore but Fleet.
Well then, how many of you pay to watch Stories?
° Jaja-Sackey is an essayist resident in the United Kingdom