Elon Musk is the new Twitter Lord. He announced an $8 per-month fee for verified users. … [+]
CONTACT THE FINTECH SARK TANK FOR OBSERVATIONS
Is there a check mark beside your Twitter username? Congrats! Congratulations!
Unfortunately, you will have to pay $8 per month for that little ego boost you had, as Elon Musk, new Twitter lord, has predicted.
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.
Twitter’s Revenue Strategy: Better
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.
Most likely, celebrities and politicians will just give up the blue check mark to be everyday Twitter users.
The key to a successful pricing policy is alignment—aligning cost with value. So, how can you determine the value most Twitter users want?
Exposition 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 users will or should pay for Twitter.
So here’s my advice for Elon Musk on how to create a value-driven fee structure: You can charge users based on how many followers you have.
Twitter, for those with less than 50k followers, is completely free. Twitter charges $3 to $5 per Month for those with 50k to 100k following. Have 100k to 250k Twitter followers? Gonna cost you $10 to $25 a month.
Consider celebrities or politicians who have millions of followers. To blast their messages to millions of followers, they should pay $100-$500 per month.
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?
These people can be placed on a wait list while current followers unfollow them. Elon Musk can even charge those who want to unfollow a Kardashian, who might have reached a certain limit on her following.
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.
