A business model for Twitter: Pay up

The Web spirit of "build an audience and figure out the business model later" is a great filter. It allows products and services into the wild without barriers or the need to sell advertisers on an unproven concept.

Those who can build an audience, such as Twitter and FriendFeed, and before them Google, Facebook, and dozens of others who turned into giants, have the scale to develop monetization schemes that a loyal and fanatic user base won't summarily reject.

In the case of Twitter, the service is a hit, attracting millions of "tweeters," many of whom won't appreciate ads slipped into their Twitter stream.

Here's a solution. How about paying for what you like to use. Much of what gets sent via Twitter is a form of self-advertising. If you like Twitter so much, how about paying $5 a month for the privilege. Of course, the fee would have to include a quality of service guarantee and rebates for downtime. And, you would expect the owners of the Twitter or other services to be priced transparently and competitively, or at least reasonably if no serious competition exists.

In fact, why aren't people willing to pay for what they use? Public radio has the same problem, hence the tedious pledge drives.

A mere $5. Around here, that's less than a day's worth of coffee, a bacon cheeseburger with fries, a lowly beer, and maybe soon a gallon of gas. And you would get unlimited "tweets" and the service doesn't go down, or at least it's up most of the time.

From its inception, the Web has been about free (not like beer) and mostly advertising-supported. You might you say, those $5-per-month fees could add up. You might be paying $25 per month for services you like to use, free of advertising or with ads. Then back off on the steak burritos, country omelets, beet salads, beers, or the bags of popcorn at the movie. The subscription model could work, despite its checkered history.

[jeffrey-nichols]

Twitter is great but I would never pay for it.

[Nesnejr]

Pay Up? Meh, valid points but I think I'll pass. What I believe Twitter should do it start charging for a premium API service possibly even fractions of a penny per tweet. Look at the number of businesses that have spun off using Twitter as a service. They are making money with ads so charge them back for being recognized by twitter's "from" tag and give them additional benefits so starting a business using twitter is even easier. Now I think that is a business model to build from. BTW anyone looking for a business dev person?

[WendyPiersall]

Yahoo needs to snap up Twitter now - it's a perfect match with their social strategy, plus will likely keep it free.<br /><br />Admittedly, if Twitter moved to a paid model, I'd probably pay for it. But I wonder how much value would be left after the mass exodus that would likely take place?

[Trapfnder]

Interesting Web 2.0 philosophizing in the article, "Hey, pay for it", here's the problem I find with this argument. Everyone likes free, some people like subscriptions, most people wouldn't mind paying, and noone likes being ripped off. Twitter serves a basic function thats fast but doesnt offer anything "new" persay; it's a modded InstantMessenger with a public directory. I already use 6 Instant messengers, I like Twitter, but contrary to what the technorati wants everyone to believe, Twitter is a dirty, fun pleasure,not an addiction. Jaiku and Pownce both offer cool stuff that Twitter doesnt but Twitters easy and fun. People like to moneytize everything and yeah its the capialist way but the old bait and switch is nothing new. If you want to moneytize something then start it off as a paid service. Whats wrong with that? Using the public for a testing ground then saying "Well, people like it, though we started it free, time to make them pay but only because it'spopular" rarely works. You'll get some hangers-in, but for the most part the rest of us will migrate elsewere. Sure, that thinking sucks, but that's the way it is, sucks or not. Instead of most pundits who gripe about how people don't like to pay, I submit that people are just tired of paying 2 or 3 times for things so they look for alternatives. As a consumer I pay for a movie, jacked up snacks, then I'm subjected to commercials (not movie trailers) actual TV adds which are supposed to subsidize free content like um... network tv shows?!? But that's ok somehow, I pay for content and then an advertiser gets to freely STEAL my time and I don't care that it's 30 seconds it's MY 30 seconds. If I did that at work it wouldnt be acceptable, so why is the cosumers time acceptable to steal? The music industry seems to think charging me multiple times for the same item in different ormats is great, so why shouldn't my food at home follow the same premise? I buy hamburger meat but I decide to make a casserole, thats another charge, or meatloaf, which is another charge, yeah, that's about as much sense as the record industries argument makes.<br /><br />The movie studios arent any better when it comes to dvds. Now, i admit I go along with the premise that, there's a certain amount of money involved in the production of mass market DVDs. I like the packaging and i usually only buy the "Special Edition" because i like watching the behind the scenes stuff after i enjoy a film. That said, whats the deal with me downloading movies for about the same cost as a DVD and having it "delivered digitally"? DVDs cost money, albeit, nowhere near the amount they gouge me for, and I'm usually willing to pay. Are you trying to tell me that it's perfectly to charge me the same premium on a product that requires no ink, no plastic, no stamping process, oh and alot of the times, no extras??? Are you kidding me? But thats capitalism, thats what people will say. Other people will say.. "Well, what can you do?" What can i do? I can refuse not to pay, I can look for free and cheaper alternatives, and thats what happens with these Web 2.0 plans. The consumer is just tired of being scammed.<br /><br />There seems to be some double standard where consumers are wrong because they find something offered for free then they argue when it's monetized. There ar plenty of reasons why alot of business models can not be applied to certain things. Twitters simplicity and it being free is its success, it's that simple, take away one or the other and people get bored and frustrate and move on. I summarize my argumet with this: If you went home and enjoyed sex with your wife/girlfriend for free and you found value in it and then one day she decided to monetize and charge you for services @ $5 a pop would you do it?<br /><br />Or like so many other services in life would you look for the free alternative?<br /><br />(Maybe i should have written my own article... eep...)

[bastiandantilus]

If my girlfriend/wife charged $5 a pop, she'd get it. Is Twitter your girlfriend? I hate to tell you, but she gets tweeted by EVERYONE for FREE.

[tbachoo7]

surely when you enjoy sex with your girlfriend/wife, she gets something out of it. when we twitter, it builds the audience. so the relationship changes, but why does it have to be a monetization scheme? aren't there services the user is providing back to the business?

[thomashawk]

Although you are right about beer not being free, in New Orleans it's not $5, it's $1, plus you get to drink it on the street. I have the proof.<br /><br /><a class="jive-link-external" href="http://www.flickr.com/photos/thomashawk/171921968/" target="_newWindow">http://www.flickr.com/photos/thomashawk/171921968/</a><br /><br />I'd pay $5 a month for FriendFeed. I wouldn't pay anything a month for Twitter. I might have paid $5 a month for Twitter before FriendFeed, but only if they'd added a "hide" feature.

[Trnds]

Yes,Twitter is cool, but not for money!<br />@WendyPiersall:<br />Great, a great idea -should Yahoo grab Twitter ;-)

[ajscott3]

"millions" of users? Not sure what stats you're looking at, but I would be most surprised if by now its much over 1.5m; and actives users are less according to my sources....

[rajuvegesna]

Its tough to justify $5/Month for Twitter when Google Apps is @ $4/Month. Though these are different, there is a BIG difference in the value that each of these apps bring to the table.

[controltheweb]

Besides being bought by a bigger player, Twitter could follow the Stumbleupon model (in part) by offering ads in feeds. Users state interests and are made to automatically follow pre-set system "users" who tweet links to sites (paid ads) in the user's stated interests. Add a Google-like model of determining user interest by their posts and who they follow, which links they click and you have targeted advertising.<br /><br />A paid membership option to increase the reach of your tweets (allow them to occasionally appear in the streams of users with relevant interests not yet following that user), avoid advertising and allow unlimited tweets (yes, others would have to have some--hopefully high--limits) would be taken up by many of the wanna-be twitterati.

[innonate]

I think Twitter wants to make money and a monthly service fee makes a ton of sense in the communication world; advertising doesn't that much, unless you can pair it with monthly fees to turn it off.<br /><br />But what they want more than anything, now, is ubiquity. Their niche is sizable and growing, but not mainstream. Mainstream is needed first.<br /><br />Then, I think $2 a month sounds like a good model... this is on par with Flickr's pro services. Really, Twitter needs to get a piece of my SMS bill that goes to AT&#38;T -- they it would be getting a lot more.

[jspepper]

Great article - not a surprise there - and it's something I'm dealing with all the time now: the fee versus free argument.<br /><br />TNSTAAFL, ain't that true.

[michaelkpate]

I can remember when a little web service called Blogger had this same problem years ago. They solved it by a combination of cash donations and a paid service for subscribers. Maybe the guys who run Twitter could get together with the guys who ran Blogger at the time and brainstorm?

[CascadiaCommons]

The idea of paying for every service the Internet has to offer only works if money is not scarce. While we are talking about internet 2.0 and 3.0, we talking about paying for that service with money 1.0. As long as money is issued by banks (principle + interest) there will never be enough to pay for all the services we enjoy. With money 1.0, if I'm going to pay for Twitter, I'll need a credit card at a low interest rate or I could do what the author suggested and stop eating. Or better yet, I won't use Twitter. Beer and food get me more enjoyment and stamina than Twitter. <br /><br />In an ideal world, where money is not scarce - where money is tied to my reputation and capacity to provide, then I could pay for Twitter. I could pay for Twitter, beer, food, and whatever I need or want as long as I am able to hold up my end of the bargain.<br /><br />http://www.openmoney.org.