Twitter's blue tick fee: Revenue stream or can of worms for media-tech cos

The microblogging service is making a bid for pay revenues as advertising declines

Twitter is the world’s digital public square. More than 217 million users (2021) chat, argue, fight and abuse each other on what is also known as a hotbed of hate and misinformation. Elon Musk, who acquired Twitter for (a grossly overpriced) $44 billion last month, announced a series of changes. One of these is a charge of $8 a month for verifying accounts and giving them the blue tick certifying authenticity. Usually people with a big following, celebrities, organisations or brands apply for a blue tick through the Twitter website. The charge will vary based on a country and its purchasing power parity. So, Indians might end up paying just about Rs 190 ($2) a month.

Could WhatsApp, LinkedIn, Facebook or others that are offering social media start charging users in a similar manner? Has the man behind Tesla and SpaceX opened up a revenue stream or a can of worms for media-tech firms?

Tania Yuki, now the New-York-based chief marketing officer of Comscore, is also the founder of social media agency Shareablee, acquired by Comscore last year. “In the age of misinformation, account verification is a very important solution for social media companies. Adding paid tiers for additional special features (priority in replies, mentions and search as well as the ability to post longer videos and audios that Musk is talking about) might be a reasonable revenue model for social media platforms,” she said.

An estimated 400,000 Twitter users have blue ticks. Even assuming half of these agree to pay, it would mean $3.8 million in revenues. That doesn’t seem like it will help the $5-billion (revenue) company, which is in the (messy) process of sacking half its 7,500-strong workforce in a bid to become profitable.

What happens to reach?

Every global platform is trying to diversify revenue streams. YouTube is attempting pay revenues, while Netflix will be launching its ad tier this week. But Twitter seems to be hedging, reckoned one industry observer. “Musk is taking the platform beyond microblogging. We shouldn’t take our eyes off his political leaning (reportedly right-wing). Therefore, the obvious thing to do is hedge against any advertiser pushback,” said one industry observer. He dismissed the idea of others charging. “On no other platform is verification as important as it is on Twitter,” he pointed out. WhatsApp had tried to charge $1 for annual subscription before giving it up in 2016.

“The blue tick helped anyone who held, and articulated, a point of view, and was not scared of claiming it. This may not have been much of an advantage for a regular bloke, but it certainly made a difference to news outlets, government departments, businesses, public services and celebrities of every stripe. When Harsha Bhogle tweets or the Mumbai Police tweets, they do so from a verified account,” said Paritosh Joshi, principal, Provocateur, a media advisory.

The decision to charge brings a textural change to Twitter’s content and, therefore, advertising revenues. “This shifts the onus on users,” said Akshay Gurnani, co-founder and CEO of Mumbai-based digital agency Schbang. “Earlier you could trust a verified handle. Now you need to check if a piece of content is authentic. Verification was a badge of honour worn by people, who had built their following. Now any Tom, Dick and Harry can be verified,” said he.

It could mean a rise in troll armies with enough money to pay for verification, putting out fake stuff at scale. And yet it could also mean that bots could go down. The impact on Twitter’s overall reach then is difficult to quantify. But some trends have been evident. According to a <Reuters> report, 10 per cent of “heavy or active” tweeters account for half of Twitter’s global revenue. These have been in decline even before the pandemic began.

“Ten years ago, Twitter was important like Facebook. In the last few years, the importance of Twitter (in marketing plans) was already going down because of fake news. Most of our advertisers are on Instagram and YouTube. We do a certain level of hygiene spends on it,” said Gurnani.

Musk’s hostile takeover hasn’t helped. Comscore data shows that global unique visitors fell by half a per cent from April 2022, when Musk first announced his intent to buy Twitter, to September 2022. Not surprisingly, revenues fell by just over a per cent in the quarter ended June 2022. Musk blames “activists” for the fall even as advertisers continue to hedge or pull the plug. Earlier this week, Interpublic, one of the world’s largest marketing services groups, advised clients to pause spends on Twitter for a week. Already, companies such as General Mills, Mondelez, Pfizer and Audi are among a growing list of companies that have “paused” campaigns on Twitter since Musk’s takeover. To clients asking how things will change in India, Gurnani said, “Wait and watch.”

Bird Watch

An estimated 400,000 Twitter users have blue ticks

Even assuming half of these agree to pay, it would mean $3.8 million in revenues

That doesn’t seem like it will help the $5-bn (revenue) company become profitable

WhatsApp had tried to charge $1 for annual subscription before giving it up in 2016

According to Reuters, 10 per cent of “heavy or active” tweeters account for half of Twitter’s global revenue, and these have been in decline even before the pandemic

Comscore data shows that global unique visitors fell by half a per cent between April 2022, when Musk first announced his intent to buy Twitter, and September 2022

Revenues fell by just over a per cent in the quarter ended June 2022