From the Archives: "How to Save Twitter Two Pennies at a Time"

An occasional repost of recent (or in this case, not so recent) articles

It looks like Elon Musk really is going to buy Twitter and take it private. He’ll then face the two big questions that have always plagued the site: How to make money and how to keep it from becoming such a wasteland of ill will than no one wants to use it. Here’s some advice, originally published as a Bloomberg Opinion column in 2017.

Twitter Inc. is proof that a startup can change the world without developing a viable business model. Claiming 319 million active users, the company is “a success and failure at the same time,” as Bloomberg tech reporter Sarah Frier observed after Twitter’s revenue and profit expectations fell short of analysts’ estimates last month.

So why not try something drastic? Charge for Twitter’s true value: the opportunity to tweet.

Give everyone a small ration of free tweets, say five a week. After that, charge a few cents each. The motto could be, “Give the world your two cents’ worth.” To kick things off, the company could give everyone a dollar or two in credit.

Twitter is already considering a paid subscription aimed at people who use Twitter for business. That would give them an ad-free feed and more analytics with an improved version of the company’s Tweetdeck app. This simply takes the freemium model a step further.

The objections are easy to anticipate. Micro-payments have a lousy track record. But that’s based on a different model: reader pays. Here, frequent posters pay by running down refillable accounts. It’s more like buying a cellphone data plan than paying a news site article by article. Skype uses a similar model for users who want to make Skype calls to regular phones. (I’m not a big Skype user, but at least once a year I send them $10 to have that option. With enough users, small amounts turn into real money.)

Conventional wisdom holds that a social media platform should build a big base of free users and charge for advertising. But that’s merely a rule of thumb that assumes that users are price-sensitive and advertisers want eyeballs. In Twitter’s case, it clearly doesn’t apply. Advertisers have plenty of alternatives -- Facebook, Instagram and Snapchat most prominently -- and Twitter is having trouble attracting them.

For Twitter addicts, however, only their drug of choice will do. Just ask @realDonaldTrump.

When you stop thinking of it as an advertising platform, Twitter has a clear value proposition. Attention is scarce, and Twitter an unusually good mechanism for reaching out. Even a tiny account can get read by a big one -- whether a favorite celebrity or the airline that just lost your luggage -- by putting the target’s handle in a tweet. As I know from experience, the fine folks at @AmericanAir are especially responsive.

And for those who do have lots of followers, it’s a great way to make fans feel personally connected. By not charging extra for more followers, the two-cents-worth plan would still reward people who can attract large audiences to the platform -- while at the same time making trolls and bots with few followers pay for the privilege of bothering people. (Direct messages could still be free.)

The new model requires a radical step. It would force all Twitter users to tie their accounts to a payment mechanism. Tweeters could still use pseudonyms, but paid accounts would make true anonymity more difficult (although not impossible for the truly determined). For a platform plagued by bots, trolls, and terrorists, reducing anonymity is a plus in itself. If 15 percent of active users disappear because they were really bots, as a recent study by researchers at Indiana University and the University of Southern California suggests, the platform would become more valuable, not less.

The model might not work, of course. But neither have the old ones. Consider this my two cents’ worth.