OBSERVATIONS FROM THE FINTECH SNARK TANK
Do you have a little blue check mark next to your name on Twitter? Congrats! You must be so proud.
Unfortunately for you, going forward, that little ego bump you have is going to cost you $8 a month according to Elon Musk, the new lord of Twitter.
It’s not all downside, however, as Musk indicated that users that pay the monthly fee will get priority in replies, mentions and searches, the ability to post long video and audio tweets, and only have to suffer through half as many ads as those of us who won’t be paying for the blue check mark privilege.
Musk also indicated that the price will be adjusted by country “proportionate to purchasing power parity,” which I can only guess means that Americans will be paying at the top end of the price range.
The move was inevitable in light of a Wall Street Journal report that Twitter has suffered “a massive drop in revenue” because of advertisers cutting back on using the social-media platform.
A Better Revenue Plan For Twitter
Musk’s plan to charge blue-marked Twitter a monthly fee is inane and will have minimal impact on the platform’s revenue. The purported benefits to being “blue-marked” aren’t strong enough to get most people to pay.
In all likelihood, most non-celebrities and non-politicians will simply give up their blue check mark and go back to being everyday Twitter users.
The key to a successful pricing policy is alignment—aligning cost with value. In that light, what is the value that many Twitter users are looking for?
Exposure and reach.
For many people, Twitter is simply a way to see what’s up with other people, and to share their thoughts with family, friends, and colleagues.
But for many other people, Twitter is a way to reach an audience, whether you’re a Donald Trump, Kanye West, or Elon Musk, a company looking to publicize its products, or a fintech influencer-wannabe looking to promote your blog posts (like yours truly).
These are the users who will pay (or should pay) for using Twitter.
So here’s my advice for Elon Musk on how to create a value-driven fee structure: Charge users by the number of followers they have.
Example: For users with less than 50,000 followers, Twitter is free. For users with 50k to 100k followers, Twitter costs $3 to $5 per month. Got 100k to 250k followers? Gonna cost you $10 to $25 a month.
What about the celebrities and politicians with millions of followers? They should be paying $100 to $500 per month to blast their messages out to their follower base.
The follower-to-followed ratios of many politicians and celebrities clearly shows that they’re not using Twitter to engage with other people—they’re using the platform to advertise their points of view or messages—and should pay for the privilege.
Advertisers pay Twitter to reach people who may or may not know about the company—celebrities, politicians, businesses, and even really popular people should have to pay as well.
But hold on a second, I hear you saying—what if a really popular person or company doesn’t want 1 million followers and the cost that will entail? Fine. Then they cap their followers at the level of cost they’re willing to pay.
What about the Twitter users who want to follow someone who’s reached their follower cap?
They can go on a waiting list, waiting for current followers to unfollow that person or account. And if Elon Musk wants, he can charge people who may be willing to pay for a higher spot on that waiting list if someone really wants to follow a Kardashian who may have capped her follower base.
A More Equitable Approach
Charging users by the number of followers they have won’t solve the declining ad revenue problem Twitter has, but it’s a more equitable—and value-based—approach to fee generation than Musk’s current plan.
And I bet it will reduce the volume of complaints that the “Twitter Complaint Hotline Operator” is currently fielding.