Twitter CEO and Co-Founder Jack Dorsey speaks to students at the Indian Institute of Technology (IIT) in New Delhi, India on November 12, 2018.
Amal KS | Hindustan times | Getty Images
Twitter was on a creator-focused rift.
The company announced its first subscription service called Twitter Blue earlier this month. You can now tip selected users through the app, and the company has acquired the Revue newsletter platform so developers can publish and monetize newsletters. It is also rumored to be about to launch the Super Follows feature, which would allow some users to bill others for selected content.
All of this comes after the company set an ambitious goal of doubling its revenue by the end of 2023 and growing its user base to 315 million daily active users. But it seems that Creatorn’s cuts won’t have a material impact on the company’s revenue anytime soon.
All of Twitter’s current bets on the creators space can be viewed as some sort of insurance or coverage in case there is a smart way to make money from creators cuts (advertising aside), laundry manager Jordan Fox told CNBC .
“Every platform CEO thinks: What if the direct, platform-based monetization of YouTubers explodes as a market? What if it goes from being a niche offering to a massive sales driver that is comparable to or greater than advertising than it is today? What if we miss them? ”Fox later added in an email. “Now to put fee structures around this stuff is the hedge against this scenario.”
Check out Instagram. The social media company announced that it will temporarily waive fees for its developer monetization products. However, Fox said there was a reason it wasn’t framed as a free product.
“What if the market becomes huge and Instagram wants or has to participate economically? You need to be prepared for this, as unlikely as it may seem today, ”said Fox. Currently, more than 50 million people worldwide consider themselves creators, and it’s the fastest growing segment of small businesses, according to a report by venture firm SignalFire.
Every social media giant has started betting on creators.
Instagram boss Adam Mosseri recently told CNBC that its parent company Facebook wants millions of developers who make a living from their app family. Snapchat will allow users to tip some of its most popular creators, and the company regularly pays people to post popular content on its short video service. Pinterest has also launched a Creator Fund for a small group of users.
Although the subscription business model is a way to diversify Twitter’s revenue streams, the company still makes most of its money from ads. Advertising accounts for more than 86% of Twitter’s revenue, according to the earnings report for the first quarter.
“Twitter’s main source of income will remain the advertising business for the foreseeable future. Any money made from cuts by YouTubers will be additional income for the company, ”Jasmine Enberg, senior analyst for eMarketer at Insider Intelligence, told CNBC in an email.
EMarketer expects Twitter’s global advertising revenue to grow 28.7% to $ 4.03 billion in 2021, after the cost of acquiring Traffic. A social media company’s ad inventory only has value if people volunteer to spend hours a day on the platform. And people do this mainly to view content posted by creators.
“Twitter’s value proposition to advertisers is its highly engaged user base. Creators are the main drivers of user interaction on social media, and Twitter’s new creator-centric features can help the business attract and retain creators. The end goal is to increase user engagement in the right order and incentivize advertisers to invest more in the platform and thus increase Twitter’s ad revenue, “added Enberg.
Social media companies still need doers. And they need it more than the artists who social media companies need.
“You see a lot of experiments right now where the platforms are flirting with directly monetizing the creators, but they also don’t want to overdo and alienate them,” Fox said.
This means that while these social media companies want to generate additional income by cutting creators, they need to be careful. For example, if a company is saving too much, a developer might choose to focus their time on other apps. The social media company, in turn, could then lose that person’s content stream and not lose revenue and advertising money.
“For creators whose trading inventory is words and ideas, Twitter has always been the center of the universe and they make smart strategic decisions to keep it that way,” added Fox.