In the last few months, while the technorati have mostly focused their navel-gazing on the story wars between Facebook and Snapchat, the usual chatter about how Twitter can save itself has been relatively quiet.
That said, in late March, Twitter confirmed a small story that they are considering a subscription service for publishers who want tools around posting. It was largely scoffed at. But to me, it was the first good idea I have heard from the company in a long time.
While a premium tier of analytics for publishers is a nice half-step, I believe that Twitter would be well served to go all in on a subscription model. They should charge all “head” publishers a subscription fee to publish to the service. Users who don’t pay can only read and reply to tweets.
Going all in on a paid model would solve Twitter’s business, product, spam and talent problems. It would be the right move to give the company some breathing room to build something new and valuable off the user base they already have.
When you can’t win the game, change the rules.
The Challenge Twitter Faces in 2017
As anyone who follows the tech industry knows, Twitter is in a rough spot.
Despite extreme cultural relevance and awareness, the company just doesn’t have the scale or engagement to compete with Facebook. In the last several years user growth, even counted in generous ways, has been lackluster. Spam and bullying continue to alienate users.
And it could get worse. Twitter lacks the richer media formats that are clearly the battleground of the new trend toward low-barrier expression; the company has done little with photos, let alone video or stories.
If that weren’t enough, Twitter also faces a serious product innovation dilemma. While early on some trends like mobile, the company has a poor track record of using its distribution to push new products (e.g., live video).
Most of these challenges are not new. But the rise of Snapchat removes a built-in tailwind that Twitter has enjoyed for years as the only credible foil to Facebook. With the ascension of Snapchat and Instagram, Twitter can no longer bank on getting usage, capital and ad revenue from those simply seeking a Facebook alternative. As a financier, if you want to hedge your Facebook stock position, you buy SNAP not TWTR. The same goes if you are a marketer with a budget to spend. Or an engineer interested in social and looking to join “the resistance.”
Commonly Proposed Partial Solutions
When this conversation comes up in polite society, tech executives and investors typically propose one of the same few ideas.
The first, for a long time, was that Twitter should speed up user growth by innovating on video. That was a viable possible strategy in 2014, but the moment has clearly passed. With a reinvigorated YouTube, and the full focus of companies like Facebook and Snap, there just isn’t space for Twitter to move fast enough for video to re-accelerate them.
If user growth isn’t an option, the second possible idea is to innovate on the revenue side. Meaningfully different and new ad formats, which brands crave as alternatives to mass advertising on the web, could be the way to go. This might work for a bit. Snap, leveraging experimental budgets, has generated some excitement around new formats. But with several billion dollars in revenue, Twitter needs to do more than lure experimental budgets from large companies to generate momentum.
The most popular (and I believe most viable) alternative which people like to float is that the company restructures, ideally by being taken private by a financial sponsor and dramatically slimming down its workforce.
The company could shed most of its features and product initiatives and reset to a network of more than 100 million people consuming mostly text from big publishers and brands. If Twitter was repositioned as a younger, more nimble and growth-oriented company, it would be valued differently, attract different talent and have a shot at a phoenix-like re-emergence. It is unclear, however, which investors would have the incentive and drive to make such a big structural change. There are easier ways for investors to drive value in the world.
The upshot: There aren’t really any good full solutions. Twitter, which continues to have massive brand awareness and enormous relevance among the media and celebrities, seems adrift.
A New Hope: A Subscription-Based, “Read Only” Twitter
Consider two broad facts. First, there are on the order of a few million people who get a lot of value from posting publicly on Twitter. These include politicians, celebrities, athletes, brands and members of the media.
Second, there is a much, much larger audience of individuals who follow those voices on Twitter, but aren’t actively posting themselves. These people fret about abuse, spam and bots on the platform. They probably also don’t love the ads.
Why not embrace—rather than fight—the reality that the medium is dominated by the relatively few who produce content? Why not align the business model with value and charge those who get value and have large audiences for the privilege of reach? Users who don’t pay would be limited to following accounts, replying to users or retweeting.
For those who have a lot of reach on Twitter, subscription fees to reach the Twitter audience should be more than tolerable. It might sting for some as a “bait and switch.” But the reality is that if people value their ability to reach followers, and want to see Twitter’s value as a platform grow, most will tolerate it initially—and might embrace it long-term.
Such a model would benefit average consumers too. If you charged people to post on Twitter, you would almost instantly shut down the spambot-hate speech problems. This would make Twitter a much more pleasant place that people might want to spend more time.
Over time, you could likely lighten the ad load—or even remove ads. The idea of an ad-free premium subscription social network has been a dream for many and tried unsuccessfully many times. It probably isn’t something you can successfully start from scratch, but you might be able to convert an existing social network into one.
A scheme like this will likely be culturally near-impossible for Twitter today to digest—and even in a world where it was private and under new management. It is against the internet “ethos” of giving everyone a voice. Unless perfectly managed over time, a move like this would cause protests; it would cause boycotts; and it would cause some engineers to leave.
But, if Twitter were willing to make such a move, it could see a renaissance mid-term. Such a move would be very, very hard for their larger peers to copy, and it would put them in a new space with a new business model that they could innovate on and drive in new directions. I also think that as society reconsiders the costs—not just benefits—of wide-open speech on the internet, now is the culturally right time to make a move.
It would be a death-defying feat. But it might actually be the path for Twitter becoming the internet newspaper it seems to have always wanted to be.