Twitter has a simple path to becoming an incredibly profitable business.
It has nothing to do with the engineers being more "hardcore." It has nothing to do with blue check marks.
It has everything to do with business fundamentals: looking at who's getting the most value from the platform and charging those people money.
Twitter’s unique value
Most people think of Twitter as yet another news feed. You scroll and scroll, maybe clicking on some headlines in the sidebar. There are occasional ads mixed in with the content from people you follow.
But some of us don’t see Twitter that way. To me, Twitter is this:
That is, Twitter is a distribution platform that allows my niche machine learning content to get seen by hundreds of thousands of people.
And it’s not just “a” platform. It’s the only platform that does this.
Could I get in front of this many people with a newsletter? No. I have a newsletter. It has half as many followers as my Twitter account but gets ~1% as many impressions.
What about posting on Reddit, HN, etc?
Nope. Not even close. I’ve had multiple front-page posts on a top 1% subreddit, and they got less than 100k views. Same story for HN. Even if you somehow get more views, it doesn’t snowball. You just get a one-time spike since there’s no “following” on these sites.
The closest alternatives to Twitter are LinkedIn, Instagram, and Facebook, which have both easy reposting and easy following. But…are my grandmom and high school friends going to appreciate esoteric Facebook posts about gradient descent? What Instagram image will capture my long-form content? Does anyone even read their LinkedIn feed?
No, Twitter’s combination of:
huge impression counts for quality content,
support for text + images, and
easy audience building
is unmatched.
And not just unmatched, but valuable.
Most of the reason I post is to act as content marketing for MosaicML. We make training huge neural networks way easier and cheaper. And because companies spend $100k+ on this, it’s worth a lot to us when people see my Twitter posts and sign up for a demo.
And that’s just customer acquisition. Getting tons of views also benefits our recruiting, brand recognition, strategic partnerships, research collaborations, and more.
What Twitter needs to do
If it wants to make serious money, Twitter needs to charge people like us.
Concretely, imagine they sent an email like this:
Dear @davisblalock,
Effective tomorrow morning, your posts will only be eligible for at most 10,000 impressions. To allow unlimited impressions, please sign up for Twitter Premium, which costs $.001 per follower per month.
I would immediately pull out my credit card and sign up.
At my 8,000 followers, this would cost $8/month. But in the realistic case that my employer would cover it, we’d pay 10 times this—maybe even 100 times.
Most creators don’t have that valuable an audience, but I don’t know what major account can’t monetize a few dozen cents a year for each pair of eyeballs. CPMs are a thing, and the fact that Twitter charges zero dollars for infinite impressions and link clicks is crazy.1
In short, Twitter is trying to be Facebook—assuming content creators and consumers are the same mass of low-effort users with no willingness to pay, while advertisers are the ones with the money. But the reality is that serious creators are not at all the same as casual users and many of us are willing to pay.2
Twitter shouldn’t be looking for some advertiser who’s going to pay to reach my audience. I am the advertiser. Just charge me.
But what about…
There are several possible objections to this proposal.
The biggest is that charging content creators might chase them away. This would leave Twitter with less content, causing a vicious cycle of reduced readership and reduced incentive to make content.
At some price point, this will happen. But as long as the cost is much less than the value of the impressions plus time spent creating content, the loss of content should be minimal.3 There may also be opportunities to segment creators such that the price-sensitive pay less.
Another objection is that the pricing might create perverse incentives. E.g., maybe I’m charged per link click but not per impression, so I just never post links.
It surely is possible to screw this up, but it’s hard to do worse than the current incentives. E.g., it’s standard marketing advice to post many times per day, totally ignoring the negative externality of wasting everyone’s time—people so rarely unfollow that it’s worth it to play a numbers game. And let’s not even get into the incentives around creating controversy and outrage.
No, with careful pricing, one could likely improve the incentives. E.g., maybe I’m charged less for quality posts that many of my followers like, but more for posts that no one likes. Maybe discussion threads are free and quote tweets (which are often the most vicious, one-sided dunks) are expensive. Maybe we get separate agreement vs quality upvoting like on LessWrong. Maybe spam vanishes because posting nothing but garbage costs money.
You’d need to tread carefully, but I’m sure that there are simple pricing schemes that would work—e.g., a CPM of a few cents, or paying per active follower with a generous free tier.
A final objection is that charging even a small amount might make Twitter inferior to its free rivals, causing a mass exodus. However:
Charging would only affect large content creators, not content consumers
As we’ve discussed above, Twitter has a huge moat from the perspective of many content creators. Even if services like Mastodon got 10x more popular, they still wouldn’t rival Twitter’s network. And even if they did, many people (myself included) would still cross-post to Twitter as long as the price was low enough to be worth it.
Summary
Twitter gives creators like me unbelievable reach, far superior to any alternative. And it does this for free—a CPM of literally $0—even though every large creator has a way of monetizing their audience.4 Twitter should just charge us for some mix of impressions, clicks, and followers.
You can pay Twitter to promote your content, but this is totally optional and surprisingly expensive. Worse, it comes across as super desperate—if getting one follower comes at the cost of making a hundred other people in my target audience think I have to pay to get followers, it’s not worth it.
There’s so much consumer surplus that I’m writing this post to tell Twitter to take my money so that it can prosper.
This is in contrast to, e.g., YouTube, where you have to pay creators if you want good content. Tweets are cheap to produce, too short to embed ads in, and almost always just a way to funnel people towards your “real” offering.
By “monetize,” I don’t necessarily mean money per se. Reputation within your field, political influence, awareness for a cause, whatever—if you have 10k+ followers, you’re getting something out of Twitter or you wouldn’t have spent the time building that audience.