Social as a Service? Twitter considers introducing subscriptions

Social as a Service? Twitter considers introducing subscriptions Facing falling ad revenues, Twitter is looking at introducing a premium subscription option to its platform. How viable is a subscription social network? And what can we learn from previous attempts at such a model?

“If you're not paying for it, you're not the customer; you're the product being sold.” So declared Web 2.0 pioneer Tim O’Reilly back in 2010, on Twitter.

Now a decade on from that declaration, the social networking site is reportedly considering flipping this maxim on its head by introducing a premium subscription offering to make up for declining ad revenue.

Users are currently being surveyed as to features they’d desire from a paid membership; soon, paying subscribers could be making use of features such as custom colours, longer videos, fewer ads and an “undo tweet” button.

Such a move has previously been mooted in an unofficial capacity. In 2016, sports business analyst Darren Rovell made a public proposition to Twitter for a subscription model he estimated would net $4.5 billion a year. Rovell also surveyed Twitter users as to how much they’d pay monthly to use the service – though 70% answered “nothing,” the remainder pledged varying amounts, with 6.1% seemingly willing to pay more than $5 a month. That 6%, multiplied across Twitter’s monthly active user base, equals 19.8 million subscribers.
 

POLL: How much would you pay a month to use Twitter?

— Darren Rovell (@darrenrovell) July 28, 2018

Rival network Facebook already has a limited Subscription Group feature, letting owners share content to a private, paying group of members, but has largely avoided charging users, even dropping the $1 annual fee to use WhatsApp two years after they purchased it. When quizzed by the US Senate as to whether a subscription model would be rolled out to the wider application, CEO Sheryl Sandberg was dismissive of such an idea – lest the model damage their industrial-scale data harvesting scheme.

Of course, Twitter’s profitmaking apparatus has always been notoriously precarious, with 2018 being the company’s first profitable year since launching in 2006. Adopting such a paid model is flying very much in the face of the standard money-making model that the major social networks have relied on, but with a combination of COVID-19 and “US civil unrest” impacting ad revenues, a newer and more resilient strategy is needed.

As the long and chequered history of social networks has shown, there can be merit to the idea, and many of the web’s older social networks continue to operate, albeit with some reworking or addressing a smaller target market – provided that the network proposition itself is up to the task.
  • Forty years after its establishment, it’s still possible to access the pre-Internet proto-social network, Usenet, with a number of providers offering connectivity to newsgroups for a monthly fee; these days, however, the boards are more of a hotbed of piracy and filesharing than a nostalgia trip.
  • Launched in 1995, Classmates.com was one of the earliest social networking sites on the World Wide Web, connecting US-based users with their school classmates to reminisce, view yearbooks and organise reunions. Despite placing many of its most basic features – even messaging other users – behind a subscription paywall, as of 2015, the site still boasted 70 million members.
  • The success of Classmates.com inspired the UK-based Friends Reunited to launch in 2000, with a £5 annual subscription fee (later rising to £7.50). This fee was later scrapped in 2010 shortly after its purchase by ITV, who instead opted to pursue ad-based revenue as users began to flee the site for the newer generation of social media giants. This change was, however, not enough to keep the site viable, with the site closing in 2016.
  • Other pioneering social network sites such as LiveJournal and Ryze debuted subscription services in the early 2000s, and continue to offer their premium services to niche but nevertheless dedicated audiences.
  • Consider also pseudo-social networks, such as dating apps – with Tinder and Match.com boasting 5.9 million and 10 million paying subscribers respectively – or the 60,000 premium users of the virtual world Second Life.
For many of the post-2010 “next big thing” subscription social networks however, it’s very often not such a rosy picture.
  • Launched in 2010 by Napster co-founder Shawn Fanning and Facebook executive Dave Morin (with $70 million in funding), Path offered users a privacy-conscious, ad-free experience for $14.99 a year. Focused on fostering smaller, more intimate networks, Path initially limited users to 50 friends, later expanding to a maximum of 150 before being ditched altogether. Ultimately though, despite a near-purchase for $100 million by Google, Path was unable to stay afloat against massive competition, and announced its closure in 2018 – though not before Facebook pilfered a handful of features for its own news feed.
  • Similarly, the Twitter-esque microblogging site App.net debuted in 2012, offering an ad-free platform for more tech-minded users, as well as more support for developers to create their own APIs to enhance the site experience. Users paid $5 a month (or $36 a year), while developers paid more for the option to sell their apps on the site’s marketplace. App.net also made use of crowdfunding to keep itself ad-free, and paying users could invite friends to join on a free trial basis, with some restrictions placed on features. Diminishing revenue and a lack of a subscribers, however, forced the service to close in March 2017.
According to a 2013 autopsy of the failed social network Friendster, “when the costs – the time and effort – associated with being a member of a social network outweigh the benefits, then the conditions are ripe for a general exodus.” When financial considerations enter the equation, this only creates higher demands in users’ minds on what the network delivers.

For creators looking to monetise content without social media ads, subscription membership platforms like Patreon, OnlyFans and Substack offer an alternative route to fan engagement. Patreon’s top earning account pulls in over $185,000 a month from its 36,000+ subscribers (an average of $5-6 per patron), with more revenue going towards creators thanks to Patreon’s 5% service fee – significantly less onerous than the 30% that Facebook’s Fan Subscriptions demands.

Ultimately, the user’s social experience is what will keep them returning to a particular site – if monetisation of features and services gets in the way of this experience, this may drive users away. And if the user base becomes split between haves and have-nots, non-subscribers may revolt at the idea of less functionality.

For some networks, exclusivity – the chance to connect with likeminded people – is the selling point that drives subscriptions. Without that unique differentiator behind it, nascent networks are setting themselves up to fail, as users refuse to put up money for a new service that they can find for free from established providers flush with ad cash.

Monetisation of services for the networks and for content creators is important, but it shouldn’t get in the way of the core user experience. On Twitter, where 10% of users are responsible for 80% of content, this curation is key; in a subscription-based social network, users become customers, and can more carefully choose the content they see, rather than have it controlled by algorithms or advertisers.