Time to Pay the Twitter

That’s crazy to pay for free service.  Yes, I agree.  Call it what you will.  But, everyone *and* your mother is on Twitter.  O K, not everyone.   And, not everyone’s mother.  But, high probability the person in front of you at the supermarket is on Twitter.  Meanwhile, the conversation of Twitter’s “service up-time” or lack thereof, revenue model, and competition is on the rise.

I didn’t always think this way.  If you asked many of many friends and business acquaintances, they will tell you that I was once a strong Twitter opponent.  Yes, just months ago I could be caught saying “it’s just a passing fad”, “no one really cares except those deep inside the echo chamber”.   Now, it seems the whole world’s in *that* chamber.  I’ve gone from “twitter is a waste” to “twitter is somewhat useful” to “having a little fun on twitter” to today — “twitter would be better if I paid for it”.

I’m actually telling Twitter “go ahead and charge me”.  I’m not sure if the Twitter founders and advocates are pumping their fists screaming “yes” or “dear god — you’re missing the point”.

Let’s consider a few facts.

  • 90% of Twitters content is generated by 1-2% of the registrants.   The huge mass of folks that tweet less than 10 times (i.e. sign up and tune out) is staggering.  Just do a search on “Patricia Smith” reveals that after you get through the top 20 contributors, dozens of Patricia Smiths with less than 10 followers and haven’t tweeted in months.
  • Spam and follow-bots are increasingly annoying.  15% of Twitter traffic, according to security expert Alexandru Catalin Cosoi of BitDefender, as quoted in The Globe and Mail.  Seeing a new follower like @girliej6j6 who’s following 20 times more people than are following them.  Weak.
  • The number of times Twitter is inaccessible due to Twitter server overload is majorly frustrating.  Yes, you know.  You’ve even tweeted that Twitter is twimbelling.twitter-addicts1249598011
  • More than 40% of all tweets are “pointless babble.” That’s from a study released this past month by San Antonio-based marketing firm Pear Analytics.  The study, co-authored with research firm TNS, also shows that 30% of users are tweeting to interact with family, 30% connect with celebrities, and 24% interact with other bloggers.  Because there’s no fee “per tweet”, to follow a friend, colleague or industry specialist, the model succumbs to “you should try my awesome spaghetti and meatballs recipe”.
  • Anyone ever tried to contact Twitter support.  ‘Nough said.
  • Twittter search stinks.  A royal piece of crap.   Hence, why you’re using third-party tools.  Wouldn’t it be nice if these services were seamlessly integrated?  True plug-ins.  Not apps.   (Think: native salesforce.com Appxchange.)  It would be so much easier and better experience.
  • Instantaneouness.  Yes, a new word for real-time, and where else can you get speedy answers?  Confirm an earthquake or major emerging world or local event.  Get a referral or recommendation faster on the Twitterer network.  And, hence the value differentiator between Twitter feeds, and Google, which is best for searching archives (things more than 4 hours old).   Yes, an indirect plug for why some enjoy Facebook too.

What I find most strange is that Twitter has a value of $441 million to $589 million, according to a report by an independent research firm co-founded by financial world celebrity Michael Moe.  So, it has about a 10x of $55M invested to date.  And, no revenue model.

It’s certainly against the norm for social networks to charge a fee.   Social networks seem to enjoy leveraging the old radio and TV model.  An annoying, content-based ad network.  But, I like satellite and internet, commercial-free radio and I’m willing to pay for it.   Anyone who has SiriusXM knows what I’m talking about.

Twitter isn’t purely a social network.  Maybe it’s actually useful and worth a small fee to improve the service.  Like any other brand, product or service I believe in, I’d like an easy way to impact and improve it.  You know, really be a customer.  When you get something for free, you’re not really a customer.   You are servants to whatever policies are set.  Businesses with paying customers are fixed to higher standards.   Notice how Twitter and Facebook need to keep issuing “terms of use” statements.

So, you would benefit from this model:

  • Everyone would have a verified account.  Twitter would be accountable.
  • User experience would improve with a single interface that has all your favorite integrated tools and plug-ins.  Furthermore, users would have more control over the views, compatibility, and features.
  • Porn (and other stalking advertising-type followers) would be significantly reduced – as they would have to pay to play.   In fact, Twitter could remove those accounts/users entirely.  If they object, put them in their own “room” so to speak and then if you want to follow and be followed by those types of entities, it’s your choice.  Sure, you can add a block to your account, but you still have to review each request for legitimacy.
  • Search would work.  I know there’s excellent third party products, but I’d much rather a self-contained accessible system.
  • Improvements and application usage would be driven by how customers want to use it and ability to provide innovative feedback.
  • Better mobile apps.

Making the brands pay for Twitter won’t work.  There are far too many folks out there with larger footprints than a lot of brands.  And, what it I RT (re-tweet) what my company posted, are you gonna charge for that?   There’s no way to segment the payment model.   I do agree that brand (corporate accounts) should pay a larger fee than individuals, but still advocating payment from everyone.

Twitter has been far from consistent on this topic. Biz Stone recently reiterated that Twitter would not charge users for existing usage habits; but, the company plans to launch a set of premium services, such as more detailed analytics or deeper CRM services, for which companies using Twitter may be willing to pay. See article Twitter to Remain Ad-Free launch a revenue model.   But, CEO Evan Williams stated a year ago that the largest revenue upside will come with brands being charged for access.   Biz Stone now says “it might be hard to tease out who is using the service professionally and who is using it for personal reasons, and then charge them for it. So the idea is to build a set of features that people are willing to pay for.”   Aha.

So, if Twitter costs money, we will all start migrating to a new free system, and Twitter will die a slow, painful death.  Perhaps.  But, the new system will hit the same roadblocks after awhile, i.e. where’s the revenue model.   And, will they be able to raise $50Million to invest in the infrastructure to run it and build technology relationships?   Meanwhile, Twitter can be working on harnessing their true advocates that see value in the connections.  The conversations.  The news feeds.  The recommendations.   Etc.  Etc.

Competition is coming for Twitter.   I doubt Microsoft will sit on the sidelines forever with MSN Networks and watch someone else get market share.  It wasn’t that long ago that MySpace was dominant and seemed untouchable.  Now, we only seem to talk about Facebook.   It could just as easily happen to Twitter.

Yahoo has launched a microblogging service that emulates Twitter. It’s called Yahoo Meme, and it was launched in English in early September.  Similar versions have been available in Spanish and Portuguese for a few months.  Yahoo Meme allows users to post photos, videos, and other content with short descriptions. Users also follow each other in a fashion similar to Twitter. The company says the goal of Yahoo Meme is to allow people to share content without having to join a specific social networking site. However, users do have to be registered on Yahoo.

All I’m saying is that I’m ready to pay $25 or $30/year for a better experience, reduced threats of spam attacks, and protection of my online persona and connections.  Net net.  Something will have to happen. Charging an annual rate for member usage would create instant, recurring revenue, cut down on the “my meatballs are delicious” tweets, and improves the service immensely.  Note the word “service”.

Alternatively, what if Twitter returned their VC money and made it opensource shareware.  With volunteer donations.  We could develop a diverse, superuser community of top social media influencers, which would manage the direction, and put the passionate developers together on one platform.

OK.  Back to more productive online activities.  Like studying up on changes I need to make to my fantasy football teams.   BTW, fantasy sports is another social network I pay real $ to subscribe (and also littered with banner ads that my eyes have been taught to skim over).

Advertisements

16 thoughts on “Time to Pay the Twitter

  1. Great post, Dan. An observation–users pay for utilities, marketers pay for entertainment. So isn’t the ultimate question for Twitter is, “which are you?”

    If Twitter is a true communications tool, especially for businesses, by all means users should pay. If it’s simply a diversionary pastime, marketers should be allowed less-fettered access, since users aren’t “working.”

    • Thanks, Matt. Good points. For me, I’ll pay for entertainment provide I get to engage the way I want and can manage my reputation.
      I do struggle though with where my personal life ends and my work life starts (and vice-versa).

  2. Nice post but I think you’re making too many assumptions. Mainly, that the money would be put towards what your proposing. Twitter has raised a substantial amount of money but where is it going? I think this needs to be answered before I’d be willing to pay for the service.

    Like you, I’m tired of all the Twitter spam and the robot followers but I think we’re going to have to live with it – at least until better filters are available. For Twitter to live up to it’s valuation it needs to be the platform for the real-time web. Asking people to pay for access would kill it’s chances.

    • Those are great point Chris. Oh, the advantages of being a private company. I suspect much funds being saved for a rainy day.

  3. Floggy my boy this subject is more to your strength than general, societal rants. Observational things that betray your misanthropic underpinnings. How do I know this? I seriously could only understand 2 to 3 of every ten words in this endless episode. Plus you’re not as funny as I am (I mean who could hope to be?) but you surely can hold forth so much better on the arcane matter of social electronics. It’s in the water you drink and has been since your Paly Alty youth.

    • Perhaps, Matt. But, you’d eventually be trounced by a *better* offering. Like to know how much of your own $$ you’d expunge on server space to manage those conversations.
      Maybe you & I have different needs/value we obtain from Twitter.

      • “But, you’d eventually be trounced by a *better* offering.” – How so? Surely if this business plan is any good (and clearly you think it is, if you’re proposing that Twitter themselves adopt it), then we’re going to see a snowball effect from the growing community, and rapidly reach an unassailable position in the market (in much the same way that no-one will ever kill off eBay because the community is established there, and why Myspace is doing nicely despite having technology that sucks ass in comparison to the 10000 other social networks that have sprung up after it).

        “Like to know how much of your own $$ you’d expunge on server space to manage those conversations.” – My own $$? Your $30 will cover it just fine, thankyou. (100 people each tweeting 140 characters 100 times a day for a year = half a gigabyte of data. Excuse me a moment, I think I have a USB key somewhere down the back of my sofa…)

        “Maybe you & I have different needs/value we obtain from Twitter.” – It sounds like it, yes. Twitter may be 40% babble, but if one thousandth of one percent of that babble is *my* grandma’s meatball recipe, then that’s a significant part of Twitter’s value proposition for me. Babble is valuable in context. Is Twitter (in its current form) worth $30 a year to me? Probably. Would it still be worth $30 to me once the “long tail” of occasional contributors were excluded? I suspect not. Maybe you’re in the unusual position where your entire value on Twitter is gained from that 1-2% power user category – but how can you be sure that *they* would want to stay on once their social circle had been slashed? There’s only way to know, and it seems to me that my proposition is the best way of testing that, seeing as it doesn’t involve tearing down something hugely successful.

  4. I’m glad I’m not the only one with this point of view. I wrote about this on my blog last month and just updated it tonight. You’ve done a good job of presenting this idea. Let’s hope someone at Twitter reads one or both of our posts and takes our thoughts, as well as those of all the other Twitter users, into consideration.

    If you’re interested in reading it: http://schmorgasboard.wordpress.com/2009/08/17/where-twitter-should-go/

    Diane

  5. Thanks for sharing the perspective, Dan. Lot there. What really caught my attention is your comparison of the demands and mentality a paying customer can have versus someone using a service like Twitter for free. I think that’s right on.

    I would pay for Twitter for a lot of reasons — the networking, great stories, personalized news feed, community, people. And I think everyone having to pay would indeed improve the perception of the platform.

    There are still so many people who see Twitter as a place to talk about the meatballs you mentioned or as the Verizon commercial says, to tell people “I’m sitting on the patio.” (Think that ad was almost like Verizon saying we don’t get Twitter, but that’s another story).

    If we had to pay for Twitter, yes a lot of the spammers would go away. But I think it would also legitimize the platform — doubters might say, “Wow, people are paying for this. I need to take a second look.” — and might lead to much more constructive conversation and relationships.

    Plus, the pay for play motto would save users a lot of time potentially wasted trying to research if they’re actually talking to the official brand handle.

    Do you think one of the reasons we haven’t seen this pay model yet is because such a transition would cause Twitter’s usage numbers to go way down…numbers they no doubt have used to promote and secure VC and numbers that have no doubt influenced people’s perception of the platform?

    What’s more important to Twitter? Our $25/$30 a year or the perception that many millions of people are using Twitter, a number that’s increasing exponentially? Thoughts?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s