Tesla and SpaceX CEO Elon Musk won his $44 billion bid to buy Twitter and take it private. Once the sale is finalized, he’ll be solely responsible for improving its business.
In a text to Twitter board chairman Bret Taylor on April 13, disclosed in a filing to the US Securities and Exchange Commission, Musk said that Twitter “will neither thrive nor serve its societal imperative in its current form” and that he will unlock the company’s “extraordinary potential” by taking it private.
Musk has so far pledged to limit content moderation on Twitter, as part of a campaign to promote so-called free speech on the platform, but it’s unlikely that fewer rules with help Twitter’s underlying business; in fact, it could deter users if hate speech and misinformation run rampant.
If Musk really wants to fix Twitter, he should move beyond its advertising business, which raked in $4.5 billion in 2021, focus on improving the site’s subscription offering, and make Twitter a better place for content creators to make money.
On Twitter, users often exclaim “I can’t believe this website is free” when something ridiculous happens, but as of last year not all of Twitter is free. Twitter Blue, which started rolling out in June 2021, is a $2.99 per month subscription that offers extra features.
Twitter Blue members can customize their user interface, delay tweets from sending for 30 seconds, organize bookmarks, use a ‘reader’ that makes long threads look like articles, and add their nonfungible tokens (NFTs) as verified profile pictures.
Jasmine Enberg, a principal analyst at the market research firm Insider Intelligence, says that Twitter will need to squeeze more revenue out of its highly engaged users. “The problem is that most consumers still prefer to view ads in exchange for free content rather than subscribe to a digital service,” she said, “and making Twitter subscription-only would change the entire framework for the service.”
Right now, Twitter Blue is by no means essential but provides extra perks to the site’s most dedicated users. In order to make the service really tempting, Twitter will need to lock up currently free features behind the paywall (like fan-favorite TweetDeck) or introduce something so tempting that a glut of new users will sign up. (How about an edit button?)
Two days after Musk tweeted about adding an edit button on April 4—a feature so requested it’s become a meme of its own on Twitter—Twitter confirmed it’s currently working on that feature and will test it out with Twitter Blue subscribers in the coming months.
Musk has ideas for Twitter Blue: He recently suggested that the price was too high, subscribers should get a blue check mark to verify their identity, and the website should be ad-free for those who pay. Those tweets have since been deleted.
Netflix’s recent struggles are a reminder that subscriptions are a tough business. Consumers do not want to pay recurring sums unless they think they’re getting a good value for their money. But if Twitter added an edit button behind the Twitter Blue paywall, it’s likely a good chunk of users would take the bait and start paying for Twitter.
Twitter’s top creators aren’t vloggers, makeup artists, or teenagers living together in a Los Angeles mansion. They’re largely journalists, comedians, politicians, CEOs, and crypto bros. But slowly but surely, Twitter is becoming a more creator-friendly platform.
In recent years, Twitter bought the newsletter service Revue to compete with Substack. It enabled tipping, added the Clubhouse-like audio chat Spaces, and introduced Super Follows, through which Twitter users could segment their own Twitter feed for paying subscribers.
Li Jin, a general partner at the venture capital firms Atelier Ventures and Variant, thinks Twitter should go further with these features. The new creator tools so far feel like “an appendage to the core Twitter experience,” she says. If Twitter wants to become a creator-first platform it needs to make these features feel natural and organic.
As is the case with Twitter Blue, Twitter’s creator tools are easily avoidable right now. A creator-first Twitter would emphasize user-to-user payments, with Twitter taking a small cut.
Jin, who writes a Substack newsletter, said that she and fellow writers often joke that Substack is the paywall for Twitter. Twitter is where you go to find your audience and Substack is where you convert them to paying subscribers. “That has definitely some truth in it,” she said, “Twitter has an opportunity to move into helping its creators monetize better and perhaps taking a portion of that revenue.”
This article has been updated to reflect Elon Musk’s bid was accepted by the Twitter board.