Twitter Japan, that is a subsidiary of Twitter, is planning to introduce paid Premium accounts on Twitter. This experiment is specifically restricted to Twitter Japan, reports TechCrunch, and is not likely to be repeated by Twitter any time soon in rest of the world. The question is – will paid Twitter premium account system succeed?
It is understandable that Twitter should make some serious efforts to have a revenue model, given that as of today it has no substantial source of revenue generation, except may be some small revenue that it may perhaps be generating from certain deals, e.g., the deals with Microsoft’s Bing and Google Search for displaying Twitter’s contents on Bing and Google search pages.
One possible source of earning good money for the Twitter founders (and financiers) could have been its acquisition by some big technology / Internet company such as Google or Microsoft. Much earlier, there were reports that Google was interested to buy Twitter, but I don’t think there is any scope for any such acquisition in the near future at least. Twitter appears to be in no mood to sell off. In fact, this option could have brought a very high valuation for Twitter, given its importance these days.
Once acquisition is ruled out, then there are basically 2-3 other possible revenue models. Paid accounts, advertisements, content-sharing, and the like. Twitter has already tried content-sharing with Google and Bing; but, I don’t think it would be generating substantial cash for Twitter.
Advertising could be one potential candidate and some imaginative ads method could possibly become a good source of regular income, given the quantity of content that is generated every day on Twitter. I was just wondering – can you add 10 characters more to the 140-characters tweet to contain a link to ads? I think it should be possible. 10 additional characters can possibly do wonders for Twitter with properly planned links for ads.
As for Paid Premium Account, in my honest opinion, this method will not work. Many companies have tried to use this method. It has not worked. Look at Yahoo! Mail, for example. I don’t have the ready figures. But, I doubt whether Yahoo! Premium Mail (i.e., the paid version) earns much for Yahoo. Take software. How many paid software are left now, barring some from Microsoft, Adobe, and the like? Even Microsoft is slowly shifting to the free online software access on Internet. Most of the software (and, in fact, the best ones) are available for free download, and many of them with source-code also. It is not easy to get paid customers for contents. This model is not likely to succeed. It appears that Twitter is trying to follow Rupert Murdoch who is also trying to charge for his content, though I must admit that their content models and revenue models are different.
I don’t think Twitter will be able to earn much from Paid Twitter premium accounts. If anything, it will accelerate the process of creating more Twitter-clones and some of them may successfully challenge Twitter in future if Twitter shifts to Paid Twitter Account model. This may eventually result in Twitter’s fall from its position. Already, there are reports that Twitter is coming to the saturation stage (October, 2009, figures from comScore).
Moreover, TechCrunch further reports that the Paid Accounts on Twitter will have more features, such as including photographs, audio, video in the tweets! What will happen to 140-character limit for a tweet then? If you allow a tweet to include video and audio and photos, what then is the difference between Twitter and a regular blog or some other website? Twitter became popular because of its micro-blogging feature of 140-character short messages. Otherwise, there are millions of sites on the Internet that have much better lengthy content. Twitter meant “short and sweet”. If this feature gives way to detailed tweets, then is it not like a blog, or an email or may be Mailing list or a Yahoo! Group sort of thing?
My frank opinion is that Twitter will be harming its own interests by starting paid contents. When you can get everything on the Internet free of cost, including detailed contents, why would people pay for a 140-character message on Twitter? It is true that there are some Twitterers who have breaking news and the like, who can provide such premium services, but then they can use the existing free model instead of shifting to the paid model. A paid Twitter account appears to be an open invitation to potential Twitter-clones (such as Yahoo! Meme. Remember that?) to join the mainstream micro-blogging platform.
Anyway, my best wishes to Twitter Japan and to Twitter.
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