The Future of Social Media Monetisation

Why are social media companies moving towards a subscription model? & Who is doing it right?

Why the Subscription Model?

I would note that the addition of a premium tier still only seems logical for later stage social media companies, and I would hesitate on its relevance for new products.

New social media products not only do not need to resource-heavy features, they also should not have resource-heavy features. Operating costs, by nature of the product, should be very low in the beginning, in order to focus in on delivering a unique and specific type of value, which will fit into a user’s life, but only in a very small way.

It only makes sense that at a certain level of growth, social media companies need to start switching over a subscription model. There are only so many people who exist, and who you can run ads in-front of.

Thus, the only way to increase revenue is through retention and engagement. In the past years, social media companies have fought hard to maintain a completely free service while pushing for these metrics. Thus, they decided to create algorithms which created polarisation and perpetuation of negative human tendencies.

However, does not need to be the way.

Social media companies are now experimenting with a different way to improve retention and engagement. And this new way includes the addition of new resource-heavy features, which can logically be funded by a subscription plan.

This is the topic of the rest of this article. I will be outlining the availability, goals, and offerings of three of the most anticipated premium plans: 1. Twitter Blue 2. Telegram Premium 3. Snapchat+

#1 Twitter Blue

Availability

Twitter Blue is currently available in the US, Canada, Australia, and New Zealand. It is a monthly subscription priced regionally and available for purchase in-app or on twitter.com through Stripe.

It is quite curious that Twitter is the only one on this list who’s launched the new subscription plan with regional targeting. But they are also the only ones who’ve stated that the added their is meant for a specific user segment.

The free version of the app is not going away, and they’ve made very clear that the subscription is meant to add value as a layer on top of the free version.

Goals

Twitter’s goal with Twitter Blue is to serve a different and specific customer segment — presumably a subsegment of the currently engaged customer base. It’s unclear if, and how, they would acquire a completely new demographic for the subscription plan.

In order to reach this goal, Twitter is aiming to keep the subscription fee as low as possible, and make the plan accessible to more people. And thus they’ve justified (bar Ad-free articles) keeping ads on the paid version, which they say is necessary to cover costs of building the extra layer. Although they’ve claimed the importance of accessibility, it is quite curious that they have not allowed free trials.

It seems their long term goal is to provide enough value to make their premium features worth paying for; but doesn’t that assume their current features aren’t worth paying for?

Projections shown to investors indicate that Twitter plans to doubt its total annual revenue from $3.7bn in 2020 to $7.5bn in 2023, in large part due to subscriptions. That sounds really ambitious!

Their short term goal is to use Twitter Blue as a learning process by monitoring it for feedback. This helps them decide if the features add sufficient customisation to the user experience, and work on feature prioritisation to deliver their long term goal.

I honestly cannot find numbers on how successful they’ve been. Nonetheless, I don’t know if you want to make your subscribers feel like they’re losing money in order for you to learn. I think they may need to work on their pitch…

Offerings

1. Content consumption (demand-side)

These feature additions largely revolve around the removal of distractions.

Ad-free articles, which are meant to be faster-loading and less distracting. These are read from sites within the Twitter Blue Publishers network, and pays publishers for the amount of time users spend on their content. This feature comes with the help of Twitter’s acquisition of Scroll. And it is advertised as a way for subscribers to support the publishers they enjoy reading from. I wonder where Twitter is recruiting their publishers from. Is this similar to the way Facebook paid Dow Jones or is it more centred around independent writers?

Top Articles is a shortcut to the most-shared articles in your network, including those from people you follow, and the people they follow. This is meant to help you easily find interesting content and allow you to join the conversations. Doesn’t this worsen their content proliferation problem? Or are these only articles from approved publishers within their network?

Bookmark folders, as a way to group and organise tweets for easier reference later. Subscribers are allowed an unlimited number of bookmarks and folders, which are always kept private.

It is interesting they’ve emphasised that this feature allow users to save content they do not want others to know they are interested in. But I mean, I don’t know if that is encouraging the right behaviour? Like, for me, I’d think the more important question is: Why are users so concerned about offending others with their interests in the first place? Doesn’t this mean a more positive and accepting environment needs to be cultivated?

The Reader creates a more distraction-free reading experience with long threads. You can also change the text size.

2. Content creation & distribution (supply-side)

Indirectly, Top Articles is meant to encourage content creation through enticing users to join in on conversations they are more likely to be interested in.

Undo Tweet, as a way to retract a Tweet after it’s sent and before it is publicly disseminated. This is much like Gmail’s Unsend feature, and similarly adds a lag time, which Twitter calls an “undo period.” After this period, the tweet functions the same as usual.

3. Overall user experience (side-agnostic)

Dedicated support for subscription-specific issues like managing subscriptions, accessing account/settings, enrolment issues, and troubleshooting premium features.

Aesthetic enhancements will include custom app themes and app icons, which change the display of the Twitter app icon on your phone. Choices include colourful and seasonal options. New limited featured options will also be added regularly. To me, this is an odd vanity offering.

As an iOS only feature, customisation of your navigation bar is offered, creating access to content and destinations you care about most. You must select at least 2 items and up to 6 items to keep in this bottom nav bar. You can also restore the nav bar into the default display.

Honestly a shame there are no publicly available stats on how Twitter Blue has done.

#2 Telegram Premium

This instant messaging app has just surpassed 700 million users. It is notable that growth to-date has been solely form personal recommendations, and that Telegram has never paid for advertisements.

A key difference between Telegram’s approach and Twitter’s is the removal of ads, and user-centric rather than business-centric approach.

Availability

The paid tier will be available at $5 per month, and some of the new offerings will also enhance the experience of free users. For example, being able to view stickers and download extra-large documents sent by premium users. This is a notable way for free users to get a glimpse into the benefits of premium features before committing.

Goals

In the short run Telegram’s goal with the additional charge is to use it for the resource-heavy development of premium features. Furthermore, it is a way for premium users to help support the Telegram team in improving and expanding the app.

In the long run, Telegram is dedicated to remaining free, independent, and values-driven. They’ve also made it key to continue adding features to the free tier as well while working on premium features. They are emphasising that the free version of their app is still being kept a top priority.

This is really smart, as with social media apps, the acquisition channel for any paid users is from their free users. Thus the free tier always need to come first in order of precedence. They’ve even reiterated the payment for a premium tier as an avenue to support the free version for everyone.

Offerings

Many of additional offerings are a part of the doubling of feature limits. New features are additions to existing free ones, and their benefits will be rippled out to free users as well.

Content consumption

Faster file downloading.

Voice-to-text conversation will allow users to convert voice messages into text for times they don’t want to listen. This sounds pretty useful for me! As sometimes it is just more convenient to read, and it is faster. An opportunity to rate translations is also provided to help improve the machine learning algorithm long term.

Follow up to 1000 channels.

Chat management

Create up to 20 chat folders with 200 chats each, pin 100 chats, save up to 10 favourite stickers, add a fourth account to the app.

Improvements to chat management will be added. There will be new tools to organise your chat list, such as changing your default chat folder. This means that the app will always open on your customer folder, or open on Unread instead of All Chats.

Auto-archive and mute new chats from non-contacts helps to organise busy chat lists.

Advertisements

In countries where sponsored messages are currently shown through large public one-to-many channels, they will be removed. Telegram emphasises that the previous ads were minimalist and privacy-conscious, and helped to support operating costs.

Content distribution

Increased size for file uploads to up to 4GB — equivalent of 4 hours of 1080p video or 18 days of high-quality audio.

Unique stickers including full-screen animations, which are visible to all users regardless of tier. This premium sticker collection will be updated monthly by Telegram artists. Unique reaction emojis with over 10 new emojis.

Identity curation

Animated profile pictures will allow users to create unique looping animations available for everyone on the app to see in their chats and on the chat list.

Write a longer bio, with option to include a link. Add more characters to media captions. Store up to 400 favourite GIFs. Reserve up to 20 public t.me links. Short and concise links are meant to help users’ groups and channels stand out.

Special badges will identify premium users and appear next to their name in the chat list, chat headers, and member lists in groups. This shows their contacts that they are helping to support Telegram and are a part of the club receiving exclusive features first. (And not just paying beta-testers…lol)

Aesthetic enhancements

Choose from premium app icons to add to your home screen, better matching with the user’s personality or wallpaper. Options include a premium star, night sky, or turbo-plane.

Now that’s what I call a smart subscription model strategy. Go Telegram!

#3 Snapchat+

Availability

They are currently at the stage of early internal testing.

Snapchat currently has a Beta program that involves users in the testing process before new features are released. So now Snapchat wants people to pay them to help them test their features?…

We don’t know how the subscription will differentiate from their Beta program, or if they will both be run simultaneously.

Goals

Snapchat has advertised the subscription as a way to learn more about how they can best serve their community.

Offerings

The main value proposition of Snapchat+ is access to experimental features. The precise suite of benefits for subscribers and when it will be launched is still unclear.

Here are the expected additions:

Chat Management

Pinning a profile as your #1 BFF to quickly communicate with them

Data Consumption

A huge part of Snapchat’s value proposition includes access to data containing information about friends’ activity. Building off of that, Snapchat+ is expected to allow users to see the amount of friends who have rewatched their story in the last 24 hours.

This sounds like a huge waste of time ruminating on other people’s intentions and opinions, and does not sound like a very nourishing addition, but that’s just me.

Users will have access to the location (in the last 24 hours) of a friend who has enabled their location sharing.

Identity curation

A special badge will be added to your profile

Aesthetic enhancements

Exclusive Snapchat icons

Thoughts on Snapchat+ offerings

Some of this seems over-obsessive and creepy for users to have as information. So you’ve got to question the type of person who’d be interested in these types of features.

This creates a different host of questions surrounding data privacy, and we’ll have to watch how the company navigates the new terrain. I’m not sure if the solution to extensive data given to advertisers is extensive data give to someone else…

The logical continuation of current data restrictions would include more future restrictions. Okay, but also, Snapchat Plus doesn’t even remove ads.

Future of the Ad Model

Most companies seem to be headed in the direction of less reliance on the Ad Model, but none are close to eliminating it.

Even if they do eliminate it, it seems their new strategies do not resolve the chief concerns surrounding the Ad Model’s extensive collection of user data anyway…

In an Ad Model, yes, the user “is the product,” but uhh if you’re trading one user’s location data for another user’s money, isn’t the thesis still: “you are the product”?… Only difference is that now we’re selling you to a different target market?

No matter what you call it, at its core, any business model that includes a free tier for users, involves the “sale” of data. And even in the case of fully subscription-based services, user data is still technically what drives the business, as the business’ own analysis of that data is what allows them to improve their product and run the most effective marketing.

Sorry to break it to you, but only way you can prevent people from using your data is by not giving it to them. The practical benefit of moving away from the Ad Model is literally just virtue-signalling and semantic. And it will only work until the general public catches on, and then you’ll have to move on to the next thing people don’t understand yet.

So to be honest, I think a lot of the controversy around the ad model is actually unfounded.

What’s funny is that as social media moves away from ads, there are also companies moving towards ads, like Netflix, whose subscription numbers are starting to disappoint.

What’s the difference between running ads on social media vs. on a streaming platform? And will the ad model be viewed as more permissible on streaming platforms? And why?

At the end of the day, Netflix must start using your data in order to run well targeted ads as well…

Twitter Blue Target Market

Expanding into the Long-form Content Market

I’m going to do a little hypothesising…

It must be someone who follows a lot of people on Twitter, and has a lot of content on their feed, so they are looking to parse that data through bookmarks. But I am a bit confused why the user wouldn’t just follow less people in that case? It would require a lot more time commitment to organise and read more.

Also, isn’t Twitter meant for short, rapid consumption of information that is updated and relevant? Doesn’t bookmarking essentially guarantee the antiquatedness of content? Twitter content needs to age well in order to be worth bookmarking. And I don’t know if this aligns with their current product.

And again, yes the “Edit” button was much requested, so I get why, in theory, it seems like a good idea to add an “Undo Tweet” feature, but again, a feature like this goes against their core value proposition.

Twitter is attempting to bring on a new user segment of long-form content producers and consumers through Twitter Blue. This means that they are moving towards becoming more of a super-app, by taking on capabilities currently offered by platforms like Medium and Substack.

This means that their approach to the subscription plan is actually quite different to Telegram and Snapchat. They are not providing their current user segment with an elevated experience through a fee. They are instead creating essentially a brand new product with brand new value propositions, and offering that product, not the current one, at a premium. Thus, it makes sense that they are launching Twitter Blue regionally to test with this new market segment.

Resources:

“700 Million Users and Telegram Premium.” Blog, Telegram.

“About Twitter Blue.” Help Center, Twitter.

“Telegram launches premium subscription model.” Tech Desk, The Express Tribune, June 21, 2022.

“Telegram now has 700 mn users: Here’s what its premium version includes.” BS Web Team, Launches, Technology, Business Standard, June 20, 2022.

“Twitter Blue Features.” Twitter Blue features, Subscriptions, Help Center, Twitter.

Koetsier, John. “Snapchat+ vs Twitter Blue vs … Facebook VIP?” Consumer Tech, Forbes, June 30, 2022.

Lomas, Natasha. “Telegram confirms it’ll launch a premium sub this month.” TechCrunch, June 10, 2022.

Malik, Aisha. “Twitter Blue introduces ‘Labs’ to give users early access to new features.” TechCrunch, October 28, 2021.

Mehta, Ivan. “Snap tests Snapchat Plus, a paid tier for special features and experiments.” TechCrunch, June 17, 2022.

Navlakha, Meera. “Telegram has launched a paid version.” Mashable, June 20, 2022.

Perez, Sarah. “Twitter Blue launches in the US and New Zealand with expanded feature set.” TechCrunch, November 9, 2021.

Perez, Sarah. “Twitter launches its premium subscription, Twitter Blue, initially in Canada and Australia.” TechCrunch, June 3, 2021.

Schroeder, Stan. “Snapchat Plus is official for $3.99, but it doesn’t let you turn off ads.”