Twitter is exploring the option to offer a premium subscription to users. This Twitter premium subscription would primarily be targeted towards businesses and professionals. Twitter built its success on free services for the 11 years its operated. Because Twitter hasn’t collected revenue from advertising as other social media sites (Facebook), the company wants to offer business savvy users the opportunity to get more information, faster.
Without the Twitter premium subscription, the company has reached 319 million reported users. But, Twitter doesn’t have the user numbers of other social sites that draws in advertisers. A recent article reported the upgraded subscription would be ad-free. Though tantalizing for the user, this would make Twitter’s already difficult battle to gain more market share even more difficult. Facebook has over 1.8 billion users. Its unparalleled network of users and breadth of the network make it nearly impossible to compete with Facebook’s advertising.
In addition to lacking advertising, Twitter doesn’t have consistent user growth. Analysts from an equity research firm discussed Twitter’s struggle to increase the number of users: “The complex nature of Twitter’s service has been often as a major hindrance to user growth.” The same article reported Twitter’s 2016 earnings for the fourth quarter as the slowest revenue growth since the company went public four years ago. As of now, similar slow growth is projected for 2017.
Twitter’s complexity makes limitations other social networking sites don’t have. For example, the 140 character limit. This presents an issue, with or without the Twitter premium subscription. The subscription wouldn’t expand the character limit already in place. However, offering an ad-free subscription, Twitter could see success similar to LinkedIn, which has a tiered pricing system.
The Twitter premium subscription would benefit the company by increasing their revenues and users. Whether the subscription will actualize is unknown. Purposefully extending it’s outreach to professionals would produce long-term benefits. The company would increase revenue and user growth. The competition in social media is forcing Twitter to differentiate itself. It needs to take the risk.