At a Twitter event for analysts, the company presented its plans — previously disclosed to the SEC — to double its revenue by the end of 2023, with the goal of reaching 315 million monetizable daily users.
The company, which is doing well in the wake of last year’s threat of a shareholder rebellion to replace CEO Jack Dorsey, has interesting plans for its products and is showing healthy growth, making periodic acquisitions and has managed to take its share price to record highs.
The idea presented on Friday, Super Follows, which I’ve discussed recently, suggests the development of features found on platforms such as Patreon and Substack, making it possible for followers of an account to pay to obtain a series of exclusive services, which would allow them to access group functions, newsletters, special content, offers and discounts, along with audio conversations à la Clubhouse, in addition to some kind of badge or identifier.
The idea, still with no schedule, is to be able to support payment walls that will enable an account to consider different levels of offerings, from a series of contents that are shared with everyone, to access for those who contribute economically to the activity of their creators. In short, a model of basic services plus premium services we are becoming used to for services ranging from the daily press to many other types of content, and which depends on the ability of creators to promote the growth of a conversion rate.
Persuading a Twitter follower to pay for content requires two things: firstly, that they perceive enough value in the content to want to continue accessing it when they are behind a paywall, rather than simply trying to find similar content elsewhere. This is a variable that some newspapers such as The New York Times, The Washington Post or Financial Times, or audiovisual content services such as Netflix and others have been successfully exploiting for some time now, but that has proved problematic for other media whose content is not seen as unique.
The second aspect is what I tend to call militancy: attracting users who simply want to contribute to the creation of particular content. This implies nurturing a committed community, which not only perceives value, but somehow identifies with it, feels part of it, and understands that its contribution is part of a project that goes beyond content. This is by no means simple, but it is increasingly common.
All this suggests we are seeing the emergence of a freemium economy wherein some services or content are offered for free to create the broad base of a pyramid, which then tries to seduce users with an additional offer of exclusive or premium services or content, with more or less sophisticated barriers.
For a long time, the main idea was to offer content for free, but accompanied by advertising. This model, which has suffered as a result of increasingly intrusive and annoying formats, ultimately led to freemium models such as Spotify’s, in which advertising was used as a means of punishment or torture to encourage people to pay for the service.
We’re now seeing more and more freemium models: if you want to read articles on Medium, for example, created by Evan Williams, you can read some articles, but after a certain number, you will have to subscribe, or you can only read those that the author provides a link to (the links I use to share my articles on social networks are of that type). If you want to use Evernote, created by Phil Libin, you will be able to use certain features, but others will require you to subscribe. Phil also created the wonderful mmhmm video conferencing software, which is offered free for education or other groups for a certain time, but after that, requires a subscription too. In both cases, Williams and Libin found that trying to fund such models through advertising was a waste of time, and that the only way to make the service viable was for users to pay to access content. The latest social network sensation, Clubhouse, seems to be going down the same road: free basic functions and a subscription to access others, coupled with incentives for creators who generate more subscriptions.
In the end, it all comes down to conversion rates: if a lot of people want to consume your content but decide to stay in the free section, you will have to consider the balance between what you give away in that section and the value you can add in the next one you offer as premium, and try to incentivize that conversion. This is an economic model that has been tried and tested for some time now, but which we will start to see everywhere.