Twitter needs to make money and you could soon be charged for using Twitter. What form that will take, when and how much have yet to be answered.
How much are you willing to pay? Are you willing to pay at all?
I woke up this morning to a story on CBC about the possibility of paying for Twitter. The comment was they have a long way to go to compete with Facebook’s 200 million users (I guess Twitter has 32 million).
I have heard this before, mostly from people who are likely users of one or none of the aforementioned services, that there is competition. Anyone who is familiar with both services understands that they are quite different. It’s not really about competition.
Though that is the case, Facebook has definitely tried to work in some of Twitter’s look, and with many complaints along the way. In the hopes of keeping users from falling off? Why?
Facebook’s purpose is quite different and many people have already integrated Facebook and Twitter, at least in terms of updating their status in Twitter and pushing it to Facebook. Maybe Facebook should make it so you can update your status there and push it to Twitter? Makes sense and Twitter makes it easy to happen.
Facebook is mostly about connecting with family and friends and rounding out your profile. I’m curious about the figures, but I’m sure there are many people in Facebook who don’t even update their status.
For me, it’s not an either/or proposition. I use both Twitter and Facebook and will continue using both.
Twitter: not making money in social media yet…
Twitter has already started some minor advertising on its website and I think they’re even selling t-shirts now. It’s just not enough to pay the bills I guess, so they’re thinking of charging users.
This is a path fraught with danger, and I hope Twitter tweads cawefully (sorry, had to do it) in this area.
Twitter doesn’t have a huge user base and I don’t think the community has grown to a critical mass that it can afford to alienate a large chunk of users. So what are some money making options?
- Charge a flat/monthly fee
- Freemium model
Twitter: charge a flat/monthly fee
I think a flat or monthly fee would be the worst option, no matter what the cost was. Twitter really relies on new users growing the community. Many new users have no idea what it is all about and a lot don’t come back. Those users are not likely to sign up in the first place if they have to pay to play. The existing users may stay, depending on how much the fee is.
The story I heard this morning mentioned possibly charging businesses for an account. What about employees who occasionally Tweet about their employer? Or the guy who runs his own business, but Tweets under his own name? How do you police that? It sounds like a recipe for disaster.
Twitter: make money on advertising?
So far it doesn’t seem to have gone so well. I’m not sure how they could work ads in without being too obtrusive. It also upsets a lot of people and they’ll likely be ignored, like most Facebook ads are. You can make money doing online advertising, but you need to do some serious thinking to do it well. Would it work well with Twitter anyway? I tend to doubt it.
Twitter: freemium model
In my opinion, this is the best option. There are many examples of companies already doing this, like Flickr. You give basic users simple, useful functionality. They test out the waters and decide if they’d like to upgrade to the premium service.
Flickr is a great example. You can upload photos at the basic level, but are limited in how many you can upload and your storage. With a pro Flickr account, you get unlimited storage and uploads per day. The kicker? It’s only $25! As soon as I saw that, I almost instantly signed up. At $25 per year, why wouldn’t I sign up for a Flickr Pro account?
Twitter could do the same. Money making strategies aren’t exclusive, so maybe premium users could avoid seeing ads. Perhaps they could use a standalone client that Twitter is hopefully developing. Maybe they could get 200 character Tweets.
Twitter freemium pricing
The trick is finding the pricing sweet spot. I have given this some thought in recent months and I like the $25 annual fee level. I think with many users, even up to $50 would be okay.
Don’t be greedy though Twitter. If you indeed have 32 million users, if even just 10 per cent signed up to a $25 freemium Twitter account, that would be $80 million per year. I am willing to bet there are 3.2 million people willing to shell out a measly $25 a year to get a Twitter freemium account. That’s about the price of a case of beer, and it’s good for the whole year. A case of beer doesn’t last me a year or give me as much as Twitter does.
I would like to see Twitter stick around. I find it useful and I like the friends I’ve made there. I’m hoping Twitter makes the right decisions and really thinks it through when they’re deciding how to make money online. The wrong decision may just send people looking for their competition.
Tomorrow’s article: Advertising isn’t so bad if you do it well, Facebook isn’t