How Twitter should make money

When I was in San Francisco back in April it didn’t take long for me to get introduced to the most popular social game in town: how will Twitter make money? I played the game in three or four different groups, made some obvious beginner’s mistakes, and had fun.

Unfortunately for those still playing the game I think I solved the problem. I now know how Twitter should make money. Judge for yourself.

Twitter should make money by charging those users that follow more than, say, 1,000 people. In general, it should charge maybe 0.1 or 0.2 cents per person you follow per month, with the first 1,000 for free. Discounts for power users who are following tens of thousands of people should probably apply.

Note what I’m saying: it’s the following number that counts. The number of followers is irrelevant.

The small user who follows a couple of dozens of friends plus quite a few celebrities doesn’t have to pay a thing. The celebrity who’s followed by hundreds of thousands of people but himself follows only a few dozen doesn’t have to pay, either. That’s good, because these two groups form the core of Twitter. Without them the service would lose a lot of its appeal.

The two groups that are going to have to pay for their Twitter use are large companies who use Twitter as a communications medium, and ego users who follow a lot of people in order to get them to follow them back and increase their follower count.

If a customer services department makes serious use of Twitter it has to follow all of its followers because that allows for direct messaging and more-or-less private communication. They should pay for the privilege, just as they pay their phone carrier, their bulk mail carrier, and other companies that maintain communications channels.

The ego users have proved that following a lot of people seems to be a recipe for getting lots of followers. I don’t understand why this is so, but meanwhile I’ve seen so much evidence that I dont’t doubt it is so.

I’m very glad that my plan requires these ego users to pay. I’ve felt for a long time that they pollute the tweetosphere a bit (and especially the top hundred lists). Their very high follower count is only impressive when you don’t compare it to their following count, which is usually a few percent higher.

If the ego users have to pay for the privilege karmic balance is restored and I’ll be a lot happier. Besides, Twitter will make a lot of money and its continued existence will be safe.

Good idea?

(Oh, and Twitter, if you actually implement this scheme you owe me an invitation next time I’m in San Francisco.)

This is the blog of Peter-Paul Koch, mobile platform strategist, consultant, and trainer. You can also follow him on Twitter.
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1 Posted by RyanC on 2 September 2009 | Permalink

YES! This makes more sense than any other suggestion I've seen thus far... and it has the added bonus of serving as an effective deterrent for spammers... :)

2 Posted by Andrew Jones on 2 September 2009 | Permalink

Good idea, especially as it will likely get rid of the ego users.

The best one I have heard is to charge people who want to search tweets from way back in time in order to carry out trending research or for journalism.

This wont affect most people and those that do get affected should be happy enough to pay.

3 Posted by James on 2 September 2009 | Permalink

Interesting. I don't think it would work though.

First, most Twitter accounts are publically viewable.

The fact that most (if not all) people follow others via Twitter's "following" mechanism is really just a convenience. I could build something on top of the API that would allow me to "follow" any number of people for free, and I imagine that third parties would waste no time capitalizing on this very thing - "we'll let you follow 10,000 people for 50% of what Twitter charges!"

4 Posted by Neil on 2 September 2009 | Permalink

I have to say I disagree. From having developed a lot of websites which have attempted to charge users, I have concluded that people just will not pay for social networking sites...

I would suggest that every Nth tweet served to a user should be a (preferably relevant) advert.

I honestly think that's the only way to make money from Twitter...

5 Posted by Simon on 2 September 2009 | Permalink

@James - You're right only when you consider following to be "reading others' tweets". I can already subscribe to as many twitter account public RSS feeds as I want, so that's not even an issue now. The point is that people can see who someone is following, and following someone in Twitter grants some abilities that exist only within Twitter and can't really be replicated outside (direct messaging, as PPK noted).

6 Posted by James on 2 September 2009 | Permalink

@Simon, yes, I see where you're coming from. Still, I can't see PPK's idea working, at least not well.

I think the concept of value should really be considered here. Twitter is essentially a textbox... an outlet for opinion, information and news. For me, twitter is worth a bit, but nothing monetarily... not to the individual at least.

I don't think the popularity of any service can translate to monetary worth so easily. Twitter as a whole may be worth quite a bit, but to Mr. Average it's nothing more than what he sees when he types twitter.com into his browser. You can't just expect people to submit to a scheme such as PPKs; getting people to pay for things is not easy - they must see value.

7 Posted by Andrea Giammarchi on 3 September 2009 | Permalink

@ppk there is something wrong in your logic, I cannot explain exactly what but I'll try.

I agree that an account which is following more than 1000 users are 99% of the time communication companies. How many of them? That is the most relevant part. These companies, if clever enough, will never pay their employees "premium accounts" because they already bought their "followed". What does it mean? That if as a company I have a premium account I would create a simple software able to read my paid tweets and store them in my internal DB (also I think no human can truly follow 1000 users, unless these have nothing to share...).
Once I have that, nobody needs a premium account 'cause at that point everything will become "intranet". Same is for customers service, why every one should have his own account? One company, internal redirects/distribution.

As summary, the impact of your suggested strategy could work, but the cost per "following" should be much grater than your suggested one.

Finally, I can already imagine companies with N fakes accounts and 999 followed persons each account ... not that simple to track I guess, IPs a part (but still, create a bot and that's it, isn't it?)

8 Posted by Andrea Giammarchi on 3 September 2009 | Permalink

last though, maybe Twitter should earn 10% of profits for every Twitter based application - those you have to pay, if any, since these applications would not exists without Twitter itself.
They earn? 10% to Twitter, they do not? Nothing to share then

9 Posted by Nabil on 3 September 2009 | Permalink

It is a good idea but as someone said I don't think Twitter could make money with the numbers.
The only way I see how Twitter could make money is by offering additional services to subscribe. Those options even if they don't interest 80% of people could interest at least 20%.
Now which additional services/options? I don't know yet...

10 Posted by ppk on 3 September 2009 | Permalink

Have closed comments because too much spam came in.