In one sense, it is noticeable that Twitter had a successful quarter. It had a considerably colossal increase in the number of users as the COVID-19 pandemic took hold. This social media giant hit a total of 186 million monetizable daily active users between April and June. This equates to up to 34 percent year over year. However, the company had an operating loss of $124 million within the same quarter. The reason for this loss is that ad revenue slowed.
For a reason mentioned above, the company is thinking about looking into other revenue streams apart from advertising. Such could include certain forms of subscriptions to grow Twitter real followers. Still, the company is in the very early stages of exploring the said models. However, it is not expecting that it could generate revenue from some other types of products within this year.
Some Tests Might Be Seen This Year
Jack Dorsey, the CEO of the social media platform, Twitter, had an interview with CNN. According to him, users of the platform will likely see some tests of different approaches this year. He also added that he has a high bar for when consumers will be asked to pay for some of Twitter’s aspects. However, the social media giant emphasized that they want to assure that any new line of revenue for Twitter will compliment their advertising business.
The types of products and subscription services that Twitter has in mind is still not exact. Without guessing too much, we can assume that Twitter might give an option to eliminate ads for a monthly fee, for instance.
Twitter Allegedly Posted A Job Opening About Building A Subscription Platform
Earlier this month, some rumors spread, saying that Twitter will have a paid option. This rumor spread after the company posted a job opening focused on creating a subscription platform under the codename “Gryphon.”The stocks of Twitter had a significant increase at the time. This signaled investors of the company to look for new revenue streams.
The shares of Twitter increased by 4 percent in early trading Thursday. This happened after the earnings results.
Similar to its rival social media platform, Twitter has paid much attention to offering a free service. It is making money by allowing brands and businesses to target ads within the millions of Twitter users.
As mentioned by Dorsey, the company wants to make sure that any new line of revenue for Twitter will complement its advertising business. He added that they think that there is a world where subscription, commerce, and helping people manage their paywall is complementary.
Twitter Subscriptions To Grow Twitter Followers
Furthermore, the growth plans of Twitter have been placed under scrutiny. This is because a significant number of advertisers decided to pull back due to the COVID-19 pandemic. The company announced the second-quarter ad revenues of $562 million. This is 23 percent lower in comparison to the same quarter last year.
The social media giant has also been hit by advertisers who participated in an ad boycott on social media platforms. This boycott was done in connection with the racial justice protests that took place nationwide. Users of Twitter still want to get more Twitter followers, so the subscription plan seems realistic. However, the executives of Twitter declined to announce how much impact the ad boycott had on the social media platform’s business.
The earnings of this social media giant follow what its CEO described as a tough week. During that time, the company scrambled to address a massive hack that affected several verified accounts. The hacked accounts include those of former US President Barack Obaman, Tesla CEO Elon Musk, former US Vice President Joe Biden, as well as Amazon CEO Jeff Bezos.
Twitters Messaging Goes Back and Forth
Twitter also announced on the eve of its earnings results that dozens of Twitter accounts might have had their direct messages accessed by hackers during the security incident. One of those who had their direct messages accessed was one elected official in the Netherlands.
On a conference call last Thursday, Twitter CEO Dorsey apologized for the massive data breaching incident. According to him, the social media platform fell behind on the security obligations of the company.
Besides, Dorsey emphasized that they feel terrible because of the hacking incident. According to him, security does not have an endpoint, and it is a constant iteration. Twitter will continue to go above and beyond as it continues to secure its systems and work with external firms and law enforcement.
A Twitter Subscription Platform Might Be More Complex As It Seems
Indeed, a Twitter subscription platform appeals to investors. But taking a look at Twitter itself, a subscription platform does not demand so much.
Everyone was over Twitter last week when it posted a twitter Careers post. The post had a codename “Gryphon” and as description saying something about a subscription platform. After the internet noticed this career post, the company edited the listing. It removed those mentions, however, reinstated them later. Twitter may have edited the remarks back because it remembered that the same details were also posted on LinkedIn. Besides, it may have thought that the internet never forgets.
Never mind the listings that do not offer details about the mythical Twitter subscription platform. According to the first listing, the Gryphon team will closely collaborate with the Payments team and the Twitter.com team. On the other hand, the second listing says that the goal of the group is to rebuild some of the services of Twitter. The rebuilding will be doe to produce a subscription management platform.
According to Twitter, its platform had 166 million monetizable daily active users in the first quarter of 2020. In other words, the venue was able to generate an average of $1.62 per user per month during its most recent quarter.
The explanation for creating a subscription platform is dead simple. Investors would win if the social media platform converted some of those users into a paid subscription. A paid subscription costs $5 per month, which is higher than what it generated per user in the first quarter of 2020.