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A Viable Business Plan For Twitter: Keep An Eye On Spotify

My recent article that asked readers how they would react to Twitter announcing a one dollar per month subscription rate raised many interesting responses and questions. At the time of writing, about 63% of voters said they would pay this low subscription rate for a better, more professional service, which for Twitter is, I think, encouraging.

Many readers felt that Twitter would be better if they implemented a premium subscription service on top of the existing free platform. Those who subscribed could receive additional features and tools, such as

  • A bigger share of the API
  • Spam filters
  • A better personal message system
  • A way to edit posted tweets

and more. By investing directly into Twitter, we’d be endorsing our confidence in the future of the system, and as a result Twitter could remain independent – the importance of which should not be underestimated – because of the monthly revenue stream.

You’d sign up with a credit card, or pay via system such as Pay Offline. This would allow Twitter to verify everybody with a premium account, and not just celebrities. It would also add credibility to these accounts, because they would be accountable through their lack of anonymity. (You could still tweet under an alias, but because your account had been verified other users would have confidence that you were a real person saying real things.)

A one-time, free trial would be available to those who wanted to taste the premium service, perhaps over 14 days.

Businesses who have many of their employees on Twitter could buy a license, which allowed them to have X accounts (and was perhaps invoiced). Individuals could do this, too. This would be competitively priced, but perhaps businesses would pay a little more, and in return Twitter would group these accounts together in some way.

Otherwise, it would be one credit card per account. This would further eat into the spam problem on Twitter, which mostly exists because it’s easy and free to set up a disposable email address, and therefore easy and free to set up a disposable Twitter account.

And what about those who didn’t want to pay? For these guys (of which I’m sure there would be many), I think Twitter needs to look closely at Spotify‘s business model, and how well their premium subscriptions take off.

Spotify has about six million songs on their database, all of which you can access for free. The catch? You have to listen to the occasional advertisement.

Or, you can pay 99 pence for a one-day, advert-free pass (which is fantastic for parties). Or you can pay £9.99 per month, and have full access to Spotify’s premium service, which includes the much-hyped and possibly game-changing mobile access, better sound quality, exclusive access to pre-releases, and absolutely no ads whatsoever.

Much has been made about advertising within Twitter, but the size restrictions on a tweet means that anything punched into there is going to look awkward and feel intrusive. Much better for ads to appear within timelines. I think Twitter could copy Spotify’s model and send one advertisement every 25 tweets (for example) to those who wish to use the service for free.

It might look a bit like this:

A Viable Business Plan For Twitter: Keep An Eye On Spotify

(ÃœberTwitter does this now, but only ÃœberTwitter users see the adverts.)

These ads would push out to all the Twitter clients, too, and would work exactly like Google Adwords, scanning your Twitter bio, the things you typically tweet about, trending topics, and the tweets within your timeline, and be as relevant as possible. The goal is, after all, for you to click on them.

Delivering ads based on trending topics alone could be a hugely successful – after all, they are trending for a reason – although Twitter would need to work harder to stop spammers gaming the trending topics feature.

Every 25 tweets might be too often, or it might not be often enough. It might have to be impressions per hour. A little experimentation is in order. Some coding wizardry would also need to be implemented so that ads didn’t just scroll off your screen if you’re following a gazillion people.

Don’t like the ads? Pay your dollar, or whatever rate Twitter decides is fair.

This gives us two monetisation streams for Twitter.

  1. Subscriptions, and
  2. Advertisements

As with everything else in life, more subs means you can sell more ads. And business needn’t worry too much about those paying customers, because an awful lot of people, and all newcomers, would choose to access the service for free.

I’d also like to see Twitter incorporate Reddit and Facebook’s stance on adverts and let you vote them up or down accordingly, querying your reasons why for the latter. This would further improve the quality of the ads that you see.

And if you decided you no longer wished to pay (or couldn’t pay), you simply dropped back to the free version of Twitter, and lost the extra features. All your tweets, etc, would be unaffected.

All of this means that everybody wins. Twitter wins, because they have a viable business model and two income streams. The users win, because Twitter could remain independent and continue to add features and grow. The power-users win, because they get to pay for a bigger slice of the pie and better stuff. And the casual user wins, because they can continue to access Twitter for the asking price of just a few adverts per day.

If Spotify really takes off, and there’s every indication that it will, Twitter doesn’t need to look much further for a very workable and network-acceptable business plan. It’s all right there, happening in front of our eyes.

I don’t see much of a downside. You?

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