Twitter makes all of its money from ads. It’s trying to change that.

Twitter makes all of its money from ads. It’s trying to change that.

2021-05-04 13:00:00

Twitter has been a free service for its users since its launch in 2006. Now it's getting more and more serious about charging you, through an optional subscription service it is building.

Here's the most recent example of Twitter's plans evolving in plain sight: it bought Role, a startup that sells an ad-blocking service on subscriptions and distributes most of its revenue to publishers.

Twitter says Scroll, who worked with publishers including the Atlantic, BuzzFeed and Vox Media, will continue to operate, although it will temporarily stop signing up new subscribers. What's more interesting about this announcement is that Twitter says Scroll will "become a meaningful addition to our subscription work" and will be integrated into an "upcoming subscription offering that we are currently investigating".

Twitter says it will attract all 13 Scroll employees, including CEO Tony Haile.

Twitter has not clarified what its subscription plans are – except to say it has a few and that it will continue to make most of its money with its free ad-based service.

But you can see the outline of what Twitter is up to. It has already launched Revue, a Substack clone that allows users to create and sell their own newsletters; it costs 5 percent of the revenue generated by these subscriptions. Twitter has also said it plans to "a small amount“Of all the sales generated through Spaces, a clubhouse clone that allows users to set up their own audio rooms to host conversations. Right now, the service is free, but Twitter has announced plans to sell users access to certain rooms.

And now it adds Scroll, a service launched in 2018 that allows users to block ads when they visit participating publisher sites. In exchange for removing the ads from their sites, Scroll gives publishers most of the revenue it generates through $ 5 monthly subscriptions.

Haile has said his service is not intended to replace Internet advertising, but says publishers who partner with his company can make more money that way than through advertising. From the outside, it looks like Scroll hasn't had the traction Haile would have liked: although he initially launched a network for about 300 sites, he hasn't been able to convince some major publishers like the New York Times. and the Wall Street Journal to join his network – even though they were investors in his company. And if Scroll had a significant number of subscribers, he probably wouldn't have sold the company to Twitter.

It will be interesting to see what happens with Scrolling now. On the one hand, syncing with Twitter's base of 200 million active users could give it a chance to find a much wider distribution. On the other hand, I wonder if publishers will be wary of joining a major tech platform, given previous experiences with Facebook. The social network has changed its media strategy several times and publishers have to rush to catch up – or worse.

Speaking of the other major technology platforms, Twitter's subscription push could really differentiate Twitter from other social media companies that make most of their money from advertising. Google and Facebook, the two companies that dominate digital advertising, haven't done much at all with subscription services so far. Google's YouTube offers an ad-free service with a few extra features, but that's about it.

Instead, major tech players have generally tried to partner with publishers by offering them distribution for their content, some of the ad revenue and, more recently, reluctantly offering them a license fee to access their stuff. Twitter, on the other hand, hasn't done much with media companies, aside from some start-and-stop efforts to get them to create video programming for the service. Let's see what is happening now.


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