Apparently A Debate: Would Twitter Benefit If Users Had To Pay To Use It?

from the easy-answer dept

According to Mathew Ingram at GigaOM, there is apparently a raging debate over whether or not Twitter would actually benefit as a service if users had to pay to use it. I'll admit to being a little bit surprised when I saw this, but digging into the details brought what I think is a wonderful conclusion as to why the answer is definitively "no".

This all more or less started (or at least really took off) when Dalton Caldwell, who founded Imeem, announced he wanted to create a for-pay service similar to Twitter. Caldwell states that services like Twitter don't realize their full potential in what he deems an "advertising-supported monoculture".
"All of these services are essentially in the same business: vying for the opportunity to sell you/your clickstream to advertisers. … I have no interest in completely opting out of the social Web. But please, I want a real alternative to advertising hell. I would gladly pay for a service that treats me better."
It's a concept that I think many people might first agree with...but only if they don't think about it for more than thirty seconds. The first flaw in this line of thinking is that users paying for the service is somehow a firm requirement to avoid what Caldwell calls "advertising hell". I don't think they do; rather, I think that each new service that comes out can be built upon and each innovation can make each service better, including in the way users are impacted by advertisements. As an example, Caldwell could have penned something similar in the 90's, bemoaning a Myspace that had clearly become a musical and bloated hell, so obviously we need to make a social media site that is paid for by users.

Except that's not what we needed. We needed Facebook which, contrary to all the status updates you may have read, does not charge users.

The second flaw in Caldwell's statement is the assumption that advertising does now and always will make us want to bang our heads against the walls in frustration. Certainly advertisements can be annoying, but we've talked repeatedly about how advertising is simply more content, and it can be good or bad. As digital ads continue to get better and better, this "advertising hell" may become an "advertising heaven." Or at least an "advertising purgatory," where the annoyance factor is minimal. In any case, if ads were wanted, then Caldwell's service loses out.

But perhaps that most articulate reason why a service like Twitter should not charge users to join in is made by venture capitalist Fred Wilson:
"Wilson maintains that a free model is the only way to get the kind of network effects necessary for a large consumer business. He also argues that charging users is contrary to the rationale behind such services, since the content being monetized is coming from those same users:

'When scale matters, when network effects matter, when your users are creating the content and the value, free is the business model of choice. And I don’t think anything has changed to make that less true today. If anything, it is more true.'"
What Wilson notes about the content being created by the users is the key point to me. Twitter is a great stage, but those of us that use it are the stars (to varying degrees). To charge the people who are creating the content on your platform seems completely backwards, particularly considering the effect that will have on how your service scales. 

Consider the recent story we ran about how an Irish rail operator used Twitter to reunite a person and their dog: does that happen if you have to pay for the service, reducing its user base? I don't think it does.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: business models, communications, free, pay, social media
Companies: twitter


Reader Comments

Subscribe: RSS

View by: Thread


  1. icon
    John Fenderson (profile), 26 Jul 2012 @ 9:23am

    Re: Re: Re: Re: Re: Re:

    As long as they're not trying to sniff out my passwords or shit like that I don't mind as much.


    And that's great, for you. Lots of us do mind, however, and there's no reason to mock us for that.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories
.

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.