Connect with us

SOCIAL

How Will Twitter Make Money Under Elon Musk? A Look at the Currently Proposed Options

Published

on

How Will Twitter Make Money Under Elon Musk? A Look at the Currently Proposed Options

So after week two of the Elon Musk Twitter drama, we’re left in a state of limbo, as we await the final approvals for the deal, which will eventually make Musk the head honcho at a private Twitter, which may or may not run ads anymore, may or may not allow all types of racist, homophobic and abusive speech, and may or may not be able to, one day, actually make money, despite these changes.

And we have little to go on right now as to how it will impact the company, and the platform as we know it. What we do know is that Twitter employees are increasingly nervous about their jobs, and the business that they may end up working for under Musk, while we’ve also had some slight hints as to how Musk plans to change the app.

To be clear, Twitter is not a charity, and after spending $44 billion on the app, Elon Musk will be looking for ways to maximize Twitter’s revenue intake, and recoup at least some of that cost. In a recent interview, Musk said that doesn’t care about the economics of the deal at all, and that his driving mission is to run “a public platform that is maximally trusted and broadly inclusive”.

But with huge debt, and accumulating interest, Musk has to make money too, and the bull case for the acquisition is that Musk, being the visionary that he is, sees something that others don’t, and can clear a pathway to optimal success for the platform – even though most market analysts see no viable pathway to turning any significant profit from the app.

So how will Musk do it?

Here are the areas that Musk is reportedly looking at right now – and to be clear, Musk has come up with these proposals without internal knowledge of the company and its current make up.

  • Increasing subscriptions – Musk is reportedly looking to build Twitter Blue into a registration layer, of sorts, with users paying a monthly fee to get a verification tick that confirms that they’re an actual, real person. That could better enable Twitter to tackle bots (as it would make running bot farms cost prohibitive), while it would also ensure a level of transparency in the app, because you would know, based on these new forms of authentication tags, that you’re interacting with a real person, who’s registered their contact and payment details in the app. The economics could be difficult – if Musk were to charge $1 per month for this, that would bring in $229m per month/$2.7b per annum, if the current number of active users stick around, and aren’t all bots. You’d have to assume that quite a few won’t end up paying, which brings this down a lot, and would reduce Twitter’s revenue intake significantly, if this were the only way Twitter could make money in future. For reference, Twitter made $5.08b in revenue in 2021.
  • Taking Twitter private – Of course, some of that revenue pressure is lessened if Twitter goes private, as it would no longer be beholden to shareholders who expect to see revenue rise by a defined, acceptable amount. Musk’s view is that Twitter needs to go private to ensure that it can make decisions free from the pressure of outside forces, enabling it to truly become a platform of free speech. The problem with that, of course, is that advertisers will be less comfortable placing ads alongside potentially offensive content – but that then leads into the next stage of Musk’s grand Twitter plan.
  • No more ads – This would obviously be the biggest impact from a social media marketing perspective – Musk has said that Twitter should no longer run ads at all to remain truly independent. That then also means that Twitter would need to rely on alternate sources of income, and with ads making up 98% of the company’s revenue, that’s a big hole to fill. Part of Musk’s thinking here may also be that Twitter can cut costs by also removing all of the staff that work on its ad elements, which would be a major cost saving – but even so, if Musk wants to get close to making Twitter profitable, when factoring in its operating expenses versus income, it’ll be a big shortfall to make up. It’s difficult to see how this would be possible, but maybe, Musk knows something that we don’t.
  • Charging for tweet embeds – This seems like a bit more of a stretch, but Musk has also reportedly floated the idea of charging websites for embeds of tweets from verified users, with the money potentially going back to the users themselves. That would align with Musk’s push to get more high profile users tweeting more often – maybe, if they can make a few bucks from tweeting, that could act as a motivator to get them sharing more in the app, which could spark more engagement with their fans, and generate more in-app activity overall. Of course, the counter is that people could just screenshot tweets instead, though there are ways that Musk could make tweets copyright protected, which would be even easier if he were to take this next step.
  • Make Twitter ‘Pay to play’ for users – This is a more radical move – and to be clear, Musk himself has not proposed this idea, as such, just yet. But aligning with the concept of charging users for a verified user tick (different to the current blue tick for high profile users), Musk could look to make all users pay, or they simply wouldn’t be able to use the app. Your first instinct to this is that no one will pay, right? People can just use Facebook or Instagram or Snapchat instead – so why would anyone pay to simply log on and read tweets? I thought that too, but upon further reflection, I do think that Twitter is a critical platform for many journalists, political and other media types that use tweets to stay up with the latest news. That’s why Twitter is so influential, despite having only a tenth of the active users that Facebook does – while its audience may be smaller, the people that do use Twitter are generally among the most active in their respective industries, and following the latest tweets enables them to lead trends, re-distribute the latest news to their audiences off-platform, remain in-the-know, etc. As such, I suspect that many of them would pay, and if Musk were to lock tweets down, that would mean that they’re no longer publicly accessible, making it much easier to implement charges for tweet embeds, as well as any other re-use of on-platform content.
  • Cost-cutting – The other key area that Musk is exploring is cost-cutting, which again aligns with the above points, in that Twitter could cut costs significantly if it no longer ran ads. Twitter spent $1.7b last year on sales and marketing and general admin costs, while it also spent an additional $1.2b on research and development, and $2b on infrastructure. Without ads, those costs could come down a lot, and if Musk can reduce those outgoings in a big way, he could, theoretically, make enough money from his subscription proposals to generate positive cash flow for the app over time, while also enabling it to remain independent, and therefore better able to run with a ‘free speech’ approach.  

Again, Musk has made these pitches in meetings to secure funding for his Twitter bid, and without internal insight into how the company is currently run, and what’s truly possible within the current structure, or within any future re-shaping of the business.

But it does seem like this is where Musk is likely to make his big changes, especially given that Twitter doesn’t have a lot of other paths to take, based on historical performance.

Advertisement

But there may be additional opportunities that we’re not seeing, and the general view is that Twitter has underperformed over time, with even current CEO Parag Agrawal noting in an all-hands meeting this week that:

I could have done things differently. I think about this a lot. I feel accountable for my actions I’ve taken over the last decade. I’ve only been in this job for four months, but I’ve been at the company for a decade. And yes, we could have done better. Should have done better.”

Maybe, now is the time that Twitter can make those big changes, with more freedom as an independent company – and again, many have pointed to Musk’s genius in other fields, so maybe he does indeed see something that others don’t here.

What we know for sure is that this will be the most public demonstration of that genius that Musk has ever had, and if he truly is the visionary that many believe, he’ll definitely have a chance to prove it.

Source link

SOCIAL

TikTok Rolls Out Comment Downvotes to All Users

Published

on

TikTok Rolls Out Comment Downvotes to All Users

After testing them out in the live environment over the last six months, TikTok has today announced that it’s rolling out comment downvotes for all users, as a means to flag inappropriate responses to video clips.

As you can see in this example, TikTok’s ‘Thumbs Down’ comment downvote option will be displayed at the far right of each comment, providing a quick and easy way for users to tag such, in order to help TikTok identify negative behaviors in the app.

Which is the key focus – rather than being an audience response element, like downvotes on Reddit, TikTok’s approach is actually to use the indicator as a means to weed out negative behaviors.

As TikTok explained back in April:

“We’ve started testing a way to let individuals identify comments they believe to be irrelevant or inappropriate. This community feedback will add to the range of factors we already use to help keep the comment section consistently relevant and a place for genuine engagement. To avoid creating ill-feeling between community members or demoralize creators, only the person who registered a dislike on a comment will be able to see that they have done so.

So dislike counts won’t be public, as they are on Reddit, with the purpose, again, being to help TikTok’s moderation team get on top of negative trends, as flagged by its users.

How it will likely work in this respect is that downvoted comments will be displayed to TikTok mods in ascending order, based on total downvote activity across the app, which will then enable them to them wade through the list and pick up on rising negative trends, providing another way to detect and address such in their process.

Advertisement

That could also help to limit the use of the feature for ‘brigading,’ or using it as a means to launch targeted attacks on people or opinions based on alternative motivations. You can imagine how, for example, people might try to use this feature as a means to downvote conflicting political opinions into oblivion, but as the downvotes themselves don’t impact public display, and are only an indicator for TikTok’s moderation team, that’s less likely to become an issue.

Which would be part of the reason why TikTok’s comfortable pushing ahead with a full launch – and it may well be a good way to help keep things more civil, and more positive in the app.

TikTok actually first began its comment downvote experiment back in 2020, with some researchers spotting the feature in early testing.

TikTok comment downvotes

Both Facebook and Twitter have also been experimenting with comment downvotes for similar purpose, not as a means to better surface or hide user responses, but to help identify negative behaviors based on what users think is bad, which effectively then helps to improve automated algorithms to detect such in future.

Which could be a better use of the option – though it is worth noting that Reddit’s public downvote system does help the platform highlight more relevant conversations and topics, based on actual responses from humans, as opposed to algorithmically identified trends that are guided by clicks, Likes, dwell time, shares, etc.

The problem with algorithmic trends is that divisive, negative content is amplified via this process, because sparking an emotional response, like anger, drives more people to comment and share. The algorithm then takes as an indicator that more people might want to see it, based on engagement response. The system itself has no way of determining the intent of the content, it only goes on binary signals – which means that triggering more reactions, however you can, is the best way to maximize exposure.

That doesn’t happen on Reddit, because such posts are rapidly downvoted into the doldrums of the app.

Giving actual people the chance to drive exposure in this respect may be a more beneficial approach overall, but the bigger players will never go with it because it also makes users less likely to comment, likely because they’re also concerned about their own remarks being downvoted to the pit.

Previous analysis has suggested that more than 98% of Reddit’s monthly active users don’t ever post or comment in the app, which is likely a key consideration that would limit take-up of such in other apps.

Advertisement

So they go with automated algorithms instead, which also then enables them to wash their hands of any responsibility for whatever type of content gains traction and doesn’t across their networks.

Negative content drives more engagement, and thus, more reach in their apps? ‘We don’t know, it’s based on how users respond, factoring in all forms of engagement, so we’re not responsible for whatever that leads to’.

It does seem that a human-moderated process, via public downvotes, could improve the flow of information in this respect. But the impacts on engagement could also be significant.

In any event, TikTok’s comment downvotes are not designed to help guide the conversation, and could be a valuable supplementary measure to detect rising negative trends.

TikTok says that comment downvotes are being released globally in the app from today.



Source link

Continue Reading

DON'T MISS ANY IMPORTANT NEWS!
Subscribe To our Newsletter
We promise not to spam you. Unsubscribe at any time.
Invalid email address

Trending

en_USEnglish