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Does anybody know why they have never tried to create a premium version? I've just googled, looks like they're making $0.55/user/month [1] I would have totall

by rayalez 10y ago

Does anybody know why they have never tried to create a premium version? I've just googled, looks like they're making $0.55/user/month [1] I would have totally paid $7-$10/yr for no-bullshit version without ads, focused on user experience instead of manipulating my attention. I bet many other people would too. And I would use it way more actively as a result. Why do neither twitter nor facebook offer premium/business accounts? It's not like it would cost them users, many people can still use the free ad-supported version.... [1] http://qz.com/131932/twitter-average-revenue-per-user/ http://qz.com/131932/twitter-average-revenue-per-user/

loceng 10y ago
Likely because people who are willing to pay are more valuable eyeballs to reach. IMHO that's the wrong leading metric to design for however.
untog 10y ago
> Why do neither twitter nor facebook offer premium/business accounts? Because it will cause their ad revenue to plummet. The users with money are the ones advertisers actually want to reach, so if you let them opt out of seeing advertising you'll just be left with an exclusive pool of users who won't buy anything. And no advertiser wants that.
- jerf 10y ago
  It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. OK, so the advertising rates go down... so what? Advertising rates are not what a business is trying to optimize, revenue is. Up to this point, the counter to this argument was basically "Well, what Twitter's doing is obviously working for them". But that's not quite as strong as it used to be now. How much money did Twitter leave on the table? It is, sure, possible that it would have been a net loss for them. But now I think a fresh look must be taken at the possibility that it would have been enough of a net gain to ensure their indepedence. Plus one must consider the second-order effects of receiving subscription revenue. Might they have created a different and more valuable service to their customers and made even more as a result? Advertising-based businesses face the intrinsic paradox of trying to serve two customer bases at once who have somewhat opposed interests. (Even ignoring the socially corrosive influence of advertising incentivizing our smartest people to build the most powerful spying networks in history.) It is still not determined to my satisfaction that that is a stable business plan in the modern era. One possible salutatory effect of Twitter's demise could be making the idea of subscriptions reasonable again. If even Twitter can't monetize entirely on advertising, who else can? Even Google and Facebook may be surprisingly fragile to a disruption in the advertising space, which is nominally not actually their business (even though of course it is). (The most likely disruption would be the continuing growth of ad-blocking software, but there's also the black swan possibilities as well.)
  - untog 10y ago
    > It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. Hypothetically speaking, allowing those users to opt out would mean Twitter makes $0.20/month from the remaining users, rather than $0.55/month. Will enough users buy a premium subscription to make up that loss? I don't see the evidence that they would. Of course, it's all hypothetical and none of us know the actual numbers involved. But I'd wager Twitter has looked at it at least once and decided it was not a good idea.
    - imagist 10y ago
      > Hypothetically speaking, allowing those users to opt out would mean Twitter makes $0.20/month from the remaining users, rather than $0.55/month. Will enough users buy a premium subscription to make up that loss? I don't see the evidence that they would. It can't work worse than operating at a loss until they go out of business, which is Twitter's current trajectory.
  - harryh 10y ago
    It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. $0.55/month is the mean for the entire userbase. The actual amount for any particular user can be far more or far less (well up to .55 less) than that. Users who are more likely to pay 4.95/month are much more likely to be worth more than 4.95/month in advertising revenue.
    - theli0nheart 10y ago
      > Users who are more likely to pay 4.95/month are much more likely to be worth more than 4.95/month in advertising revenue. Given the paucity of people I know who've made a purchasing decision based off of an ad on Twitter, I seriously doubt that.
      - fasteddie 10y ago
        Few people think they know others that have made purchase decisions based on online ads, yet here we have a hundred billion dollar worldwide online ad industry.
- kayoone 10y ago
  But isn't the idea that you will make more money from the business accounts as opposed to ads ?
- mmsmatt 10y ago
  I've wondered about this too, your explanation works for me.
ng12 10y ago
I wonder if Twitter missed out by not being Patreon. There's a proven business model of paying content creators directly and they already had one of the platform for content creators to communicate with fans.
- imagist 10y ago
  You're proposing introducing an expense center as a solution to their profit problem?
  - ng12 10y ago
    Huh? I mean, yes. Leverage your platform to build things that make money.
s3r3nity 10y ago
Well Facebook has "Facebook At Work" (https://work.fb.com/ https://work.fb.com/) that sort of accomplishes this, though at the moment they're not charging anything. Also, it's a bit of support/maintenance/overhead for something that doesn't have as much support as you might think - otherwise tools like Google Contributor would be blowing up. I imagine like ~1% of users would actually opt to pay, maybe 2 or 3%, based upon my experience with freemium business models at a few different companies. I think there's the hypothesis that these "pro subscribers" have higher incomes and are therefore better ripe for advertising demand. I would argue that Google has enough data and intelligence to internalize this hypothetical lifetime value from ad dollars into a reasonable price for a monthly subscription that would be roughly equivalent. If the counterpoint is that $7-10 / year doesn't quite equal how much Google could get for the same user through advertising (which could be substantially higher I think,) then it's hard to fault Sundar or Jack Dorsey or any other tech CEO in this space for going with what would provide better value to shareholders (which is ultimately their responsibility, for better or worse.)
smacktoward 10y ago
My proposal for them has always been simple: just charge for extra characters. Look at Twitter for a moment the way game designers look at free-to-play mobile games. Whittling Tweets down to 140 characters is the sort of un-fun, repetitive process that a game designer would describe as a "grind" (see https://en.wikipedia.org/wiki/Grinding_(video_gaming) https://en.wikipedia.org/wiki/Grinding_(video_gaming)). And free-to-play games have established that letting players buy their way out of having to grind is a completely workable business model. So just let Twitter power users skip their way out of grinding to get their Tweets under the 140 character limit by letting them buy bags of extra characters, preferably at low enough prices to be attractive as an impulse buy. If you spend all day on Twitter, and you're faced with the need spend five minutes editing a tweet to get it down under the limit, being able to just pay ten cents for a bag of ten extra characters and get that five minutes of your life back might be very attractive! And from Twitter's perspective, those ten cents are more or less pure profit, since the marginal cost of shipping 150 bytes over the wire instead of 140 is next to nothing. Free users can keep on using Twitter for free, power users can become the "whales" that provide the revenue that keeps the lights on, Twitter makes money. Everybody wins.

by rayalez 10y ago

loceng 10y ago

Likely because people who are willing to pay are more valuable eyeballs to reach. IMHO that's the wrong leading metric to design for however.

untog 10y ago

> Why do neither twitter nor facebook offer premium/business accounts? Because it will cause their ad revenue to plummet. The users with money are the ones advertisers actually want to reach, so if you let them opt out of seeing advertising you'll just be left with an exclusive pool of users who won't buy anything. And no advertiser wants that.

jerf 10y ago
It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. OK, so the advertising rates go down... so what? Advertising rates are not what a business is trying to optimize, revenue is. Up to this point, the counter to this argument was basically "Well, what Twitter's doing is obviously working for them". But that's not quite as strong as it used to be now. How much money did Twitter leave on the table? It is, sure, possible that it would have been a net loss for them. But now I think a fresh look must be taken at the possibility that it would have been enough of a net gain to ensure their indepedence. Plus one must consider the second-order effects of receiving subscription revenue. Might they have created a different and more valuable service to their customers and made even more as a result? Advertising-based businesses face the intrinsic paradox of trying to serve two customer bases at once who have somewhat opposed interests. (Even ignoring the socially corrosive influence of advertising incentivizing our smartest people to build the most powerful spying networks in history.) It is still not determined to my satisfaction that that is a stable business plan in the modern era. One possible salutatory effect of Twitter's demise could be making the idea of subscriptions reasonable again. If even Twitter can't monetize entirely on advertising, who else can? Even Google and Facebook may be surprisingly fragile to a disruption in the advertising space, which is nominally not actually their business (even though of course it is). (The most likely disruption would be the continuing growth of ad-blocking software, but there's also the black swan possibilities as well.)
- untog 10y ago
  > It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. Hypothetically speaking, allowing those users to opt out would mean Twitter makes $0.20/month from the remaining users, rather than $0.55/month. Will enough users buy a premium subscription to make up that loss? I don't see the evidence that they would. Of course, it's all hypothetical and none of us know the actual numbers involved. But I'd wager Twitter has looked at it at least once and decided it was not a good idea.
  - imagist 10y ago
    > Hypothetically speaking, allowing those users to opt out would mean Twitter makes $0.20/month from the remaining users, rather than $0.55/month. Will enough users buy a premium subscription to make up that loss? I don't see the evidence that they would. It can't work worse than operating at a loss until they go out of business, which is Twitter's current trajectory.
- harryh 10y ago
  It still remains unclear to me how letting users opt out of making Twitter $0.55/month by giving Twitter, say, $4.95/month is a bad idea. $0.55/month is the mean for the entire userbase. The actual amount for any particular user can be far more or far less (well up to .55 less) than that. Users who are more likely to pay 4.95/month are much more likely to be worth more than 4.95/month in advertising revenue.
  - theli0nheart 10y ago
    > Users who are more likely to pay 4.95/month are much more likely to be worth more than 4.95/month in advertising revenue. Given the paucity of people I know who've made a purchasing decision based off of an ad on Twitter, I seriously doubt that.
    - fasteddie 10y ago
      Few people think they know others that have made purchase decisions based on online ads, yet here we have a hundred billion dollar worldwide online ad industry.
kayoone 10y ago
But isn't the idea that you will make more money from the business accounts as opposed to ads ?
mmsmatt 10y ago
I've wondered about this too, your explanation works for me.

ng12 10y ago

I wonder if Twitter missed out by not being Patreon. There's a proven business model of paying content creators directly and they already had one of the platform for content creators to communicate with fans.

imagist 10y ago
You're proposing introducing an expense center as a solution to their profit problem?
- ng12 10y ago
  Huh? I mean, yes. Leverage your platform to build things that make money.

s3r3nity 10y ago

Well Facebook has "Facebook At Work" (https://work.fb.com/ https://work.fb.com/) that sort of accomplishes this, though at the moment they're not charging anything. Also, it's a bit of support/maintenance/overhead for something that doesn't have as much support as you might think - otherwise tools like Google Contributor would be blowing up. I imagine like ~1% of users would actually opt to pay, maybe 2 or 3%, based upon my experience with freemium business models at a few different companies. I think there's the hypothesis that these "pro subscribers" have higher incomes and are therefore better ripe for advertising demand. I would argue that Google has enough data and intelligence to internalize this hypothetical lifetime value from ad dollars into a reasonable price for a monthly subscription that would be roughly equivalent. If the counterpoint is that $7-10 / year doesn't quite equal how much Google could get for the same user through advertising (which could be substantially higher I think,) then it's hard to fault Sundar or Jack Dorsey or any other tech CEO in this space for going with what would provide better value to shareholders (which is ultimately their responsibility, for better or worse.)

smacktoward 10y ago

My proposal for them has always been simple: just charge for extra characters. Look at Twitter for a moment the way game designers look at free-to-play mobile games. Whittling Tweets down to 140 characters is the sort of un-fun, repetitive process that a game designer would describe as a "grind" (see https://en.wikipedia.org/wiki/Grinding_(video_gaming) https://en.wikipedia.org/wiki/Grinding_(video_gaming)). And free-to-play games have established that letting players buy their way out of having to grind is a completely workable business model. So just let Twitter power users skip their way out of grinding to get their Tweets under the 140 character limit by letting them buy bags of extra characters, preferably at low enough prices to be attractive as an impulse buy. If you spend all day on Twitter, and you're faced with the need spend five minutes editing a tweet to get it down under the limit, being able to just pay ten cents for a bag of ten extra characters and get that five minutes of your life back might be very attractive! And from Twitter's perspective, those ten cents are more or less pure profit, since the marginal cost of shipping 150 bytes over the wire instead of 140 is next to nothing. Free users can keep on using Twitter for free, power users can become the "whales" that provide the revenue that keeps the lights on, Twitter makes money. Everybody wins.