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> 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 adv

by 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.
      - theli0nheart 10y ago
        You're putting words in my mouth. I said I didn't know anyone who's made a purchasing decision because of an ad on Twitter. Online ads as a larger entity—that's a completely different story. The vast majority of the online advertising spend which you speak of goes to PPC search, not the 2016 equivalent of banner ads.
      - mschuster91 10y ago
        > yet here we have a hundred billion dollar worldwide online ad industry. ... which is plagued with spam and fraud. Victims are both the advertisers (who pay for ad slots that are viewed/clicked by bots) and the consumers (who suffer from malware ads, un-usable websites because there are 30+ trackers, ad brokers etc. on one single site, and higher product prices because the vendors have to pay for ads). The only ones who profits are the countless middle men - ad brokers and "big data analysis/retargeting" companies which kill user privacy on a global scale while providing next to zero value. We should, once and for all, simply massively regulate advertising and re-think about how we as a society fund the services currently funded by ads. Especially in media, where "real" journalism had to step back in favor of ever more clickbait crap...
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.

by untog 10y ago

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.
    - theli0nheart 10y ago
      You're putting words in my mouth. I said I didn't know anyone who's made a purchasing decision because of an ad on Twitter. Online ads as a larger entity—that's a completely different story. The vast majority of the online advertising spend which you speak of goes to PPC search, not the 2016 equivalent of banner ads.
    - mschuster91 10y ago
      > yet here we have a hundred billion dollar worldwide online ad industry. ... which is plagued with spam and fraud. Victims are both the advertisers (who pay for ad slots that are viewed/clicked by bots) and the consumers (who suffer from malware ads, un-usable websites because there are 30+ trackers, ad brokers etc. on one single site, and higher product prices because the vendors have to pay for ads). The only ones who profits are the countless middle men - ad brokers and "big data analysis/retargeting" companies which kill user privacy on a global scale while providing next to zero value. We should, once and for all, simply massively regulate advertising and re-think about how we as a society fund the services currently funded by ads. Especially in media, where "real" journalism had to step back in favor of ever more clickbait crap...

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.