The weeks since Elon Musk took the reins of Twitter have been filled with havoc – including a launch, takedown and relaunch of premium service ‘twitter blue’ as well lay offs, and contentious tweets… all in a bid to monetise content. So, what does the future look like for Twitter? And what is Manifesto’s take on all of this?

Summary of events:

Let’s quickly look through the most notable events following Musk’s Twitter acquisition. Almost immediately after acquiring the social media platform Musk commenced layoffs that cut roughly half of Twitter’s 7,500-person workforce. To make matters worse, the company made these announcements via email.

Next came the new version of its subscription service, Twitter Blue, which allows users to access ‘blue tick’ verification if they pay a monthly fee of $8. This plan caused immediate polarisation. With some applauding the move as a means of making verification more inclusive and weaning the platform off a dependance on advertising revenue. Whilst others slammed the decision, fearing that it would result in impersonation and fake content. To no surprise, shortly after the launch, an influx of imposter accounts ran rampant across the platform, impersonating public figures and brands, such as LeBron James and Tesla. Musk swiftly backtracked on this approach, and has now launched a tri-coloured, manually authenticated, verification process. With gold ticks for companies, grey for governments and blue for individuals.

A blend between the chaos and bad press has had a substantial impact on Twitter’s finances. Media Matters for America published a report unveiling that the platform has lost half of its top advertisers since the acquisition. These companies had brought in over $750 million in advertising in 2022, but concern over the site’s potential new strategies for moderating content and the impact of these policies on their brand image has driven them away.

Manifesto’s take:

Whilst Musk’s acquisition of Twitter has been far from plain sailing, we can uncover some sense behind the madness. We live in a ‘Creators Economy’, and therefore, moving from an ad based to subscription business model is an effective method of content monetisation. Twitter’s pre-Musk business model was centred around 2 key revenue streams: 89% advertising and 11% licensing. Twitter’s adverts were targeted and personalised, and the social media platform used a unique algorithm to align ads with a users search history and pages they interact with. 3rd party applications would also pay a fee to access Twitter’s wealth of aggregated data – this grew in popularity over the last financial year, with data licence revenue increasing by 12.3%. However, due to the drastic decline in Twitter’s top advertisers, diversifying beyond ad revenue is essential. But this time, the platform needs to learn from the shortcomings of Twitter Blue, and launch a subscription model in the right way.

Youtube is an excellent example. Youtube’s primary revenue stream is advertising, and these adverts also provide opportunity for content creators to monetise their content. Furthermore, Youtube premium caters to the needs of avid Youtube users. It allows subscribers to watch videos without ads, download videos to watch offline, access exclusive content and watch videos in the background while their phone is locked or they’re using another app. As a result, approximately 50 million people have subscribed to Premium and YouTube Music as of last September. Evidently, Youtube’s business model successfully caters to the specific needs of content creators, subscribers and advertisers, providing them with compelling value propositions and ultimately delivering a High Performing Customer Experience (read more about HPX here). Therefore, following suit are TikTok and Instagram. Instagram is currently testing a monthly subscription where subscribers pay a fee ranging from $0.99 to $99.99 to access exclusive content from creators, and receive a purple badge on their profile to indicate they’re a subscriber. It is clear that there is demand for subscriptions in social media, however, the offering has to be suitably different to the free option, it has to be well thought through and cater to customer needs without disenchanting advertisers.

Learning from Twitter’s mistakes, here is Manifesto’s take on what makes a best in class social media subscription model.

• The offering has to be differentiated. People will only pay for something that is remarkably different, or better than, the unpaid for version.

• Research is key, and all shortcomings need to be well thought out. Comprehensive research and deeper thought could have saved ‘Twitter Blue’.

• Pricing options, or tiers, are essential. The days of one size fits all pricing are long gone. Subscribers want to pay for the level of service that meets their specific needs. No more, no less.

• Provide an exceptional subscriber experience. Continuously finding ways to evolve with customer needs. Surprise and delight, and protect subscriber experience at all costs.

Musk’s vision for content monetisation also encompasses payments. In order to effectively monetise content, the platform would need to be underpinned by a payments system that could handle frequent, low-value payments, with Twitter likely to take a cut of each. However, it doesn’t stop there, Musk envisions users being able to send money to others on the platform, extract their funds to authenticated bank accounts and, later, perhaps, be offered a high-yield money market account to encourage them to move their cash to Twitter.

On paper, this is the ultimate example of innovation in payments and is the epitome of evolving with customer needs and technology. Users want a one stop shop where they can interact with their favourite content creators, seamlessly transfer money to friends and family in a user friendly, easily accessible way. It is the perfect blend between social media, entertainment and practical payments. And the demand already exists, there is already a widespread payments market on Twitter, and millions of dollars are sent every month to creators in the form of tips, as well as donations to individuals and payments for goods and services. However, this is currently facilitated by third party providers. The success of payments on Twitter, and any future developments from there, depends on how they are implemented, KYC compliance and ensuring the level of existing user trust is not further destroyed.

To conclude, whilst you could argue Musk has taken actions to create a leaner workforce, and has used Twitter Blue to test and learn, all of which are usually effective business practices, his execution has stirred up quite the media storm. This has sparked reputational damage, deterring advertisers and users alike, from using the platform. Whilst we believe Musk has a strong vision for the future of Twitter, that encompasses innovation within payments and content monetisation, he needs to ensure he treads carefully and takes the right steps to safeguard the integrity of the platform, its advertising revenue and users. To do this, time and thought need to be put into the subscription model, its offering, pricing and means of delivering an exceptional subscriber experience.