Twitter has a profit problem, like many platform companies. Events have been unfolding rapidly in the last ten days at the company. Advertisers are pausing their investments or leaving altogether, which is significantly impacting their roughly $5B of revenue (2021). They’ve recently laid off nearly half of their staff. And—as we often see—they’re changing pricing structures.
However, it’s unlikely that the solution to that problem is to start charging a fee for verification, something that is free today. Best case scenario, all users agree to the fee and the gap is closed by a nominal amount. There are approximately 150K verified users and if everyone paid the $8/mo, that’s an extra $14.4M/yr… which is nothing compared to their overall ad revenue of around $4.5B. So, why upset the base and risk the ad revenue, all for such a nominal gain?
Shaking the foundations
It’s also important to note what this change will cost in the greater picture. Trust of the platform has been publicly challenged at scale before the change has even been implemented. Verification has a benefit for the user, community, and the company, so to make only the user pay is not only perplexing, but a risky strategy.
What was previously a “green flag” that a user can be trusted as who they say they are, can now be purchased for a small fee by anyone and undermines the entire system. The potential for a snowball effect is high, and if a significant portion of users leave the platform, then Twitter will likely further jeopardize their ad revenue. How can a company risk the trust system of a platform with over 300 million users?
Introducing tiered offerings
As for pricing, consumers like to have choices when they are asked to spend their money—especially when they have experienced the value at no charge. This kind of change requires a different kind of adoption plan without alienating the user base. Verified users today value all the current features at zero dollars because they are not paying for anything.
In order to have them pay, there needs to be a “give” from Twitter. One way to do this is to have tiered options. Tiered options might include giving users a choice to stay at a free level with slightly reduced features for the traditional check mark, or pay for additional features like less ads for a check "plus" level as a starting point.
It will likely take time to align the right features to value for that user group and set pricing relative to that value, but the bigger issue is how will they earn back the trust that they seem to have lost with this quick public decision making and flip flopping. What will it take to repair that trust?
