@Google 17.6 million<\/li>\n<\/ul>\nI suspect most of these\u00a0businesses spend large sums (with in-house personnel or outside agencies)\u00a0planning and developing their Twitter activities \u2014 a clear form of advertising that provides value, with no portion going to Twitter. Why would it be wrong\u00a0for Twitter to capture, through fees, a piece of the economic value its service\u00a0brings these companies?<\/p>\n
To assess the potential magnitude this change might have on Twitter\u2019s bottom\u00a0line, let\u2019s take a hypothetical example: Suppose Twitter collected an average\u00a0annual fee of $600,000 from 2,000 businesses. This would\u00a0represent increased annual revenues of $1.2 billion. Of course,\u00a0there would be costs associated with implementing this policy, but the upside\u00a0is enormous: Most of this $1.2 billion increase in revenues would drop straight\u00a0to the bottom line.<\/p>\n
The reality of value delivered<\/h2>\n I don\u2019t claim to know what the right fee is, or how this fee should increase by\u00a0the number of followers involved. But, let\u2019s ask the most important\u00a0question: Would a major brand leave Twitter if a new fee of $50,000 per month\u00a0were imposed? Companies with millions of followers derive far greater economic\u00a0value than this monthly sum. Indeed, I strongly suspect many companies\u00a0spend far more simply staffing their Twitter-related social media campaigns\u00a0and working with outside agencies. Of course, this would be a cost, which adds\u00a0to these existing expenses. But, once again, I strongly suspect tweets bring\u00a0these companies far higher returns than this proposed monthly fee plus any\u00a0social media management expenses. I also believe these companies know it.<\/p>\n
In short, a central reason for Twitter\u2019s profitability problem is that it has been\u00a0far too good a deal for large advertisers (defined as any company with a substantial Twitter following, which means the company has an active,\u00a0significant Twitter presence).<\/p>\n
Yes, I think it\u2019s legal<\/h2>\n I have discussed this idea with a limited number of colleagues. Inevitably, they\u00a0ask whether charges of this type, levied solely on companies with large follower\u00a0bases, might represent some form of illegal price discrimination. My\u00a0understanding is that this suggested revenue idea is entirely lawful.<\/p>\n
Here\u2019s how it can be done:\u00a0First, let\u2019s take a \u201cworst case\u201d example that assumes, under the applicable law,\u00a0corporations that are Twitter users have the same rights as people. Then, these charges could be defined as advertising fees on any Twitter user that has more\u00a0than 250,000 followers. (Remember, Twitter allows users to block followers, so\u00a0no one forces a person or corporation to move from the free classification to the\u00a0new, higher-follower paid classification).<\/p>\n
Second, discounts for different categories of advertisers (which can be defined\u00a0by purpose or commercial segment) are, I believe, legal. As a result, individuals\u00a0and entities with a non-commercial purpose, such as politicians, journalists,\u00a0academics, news entities, governmental entities and all nonprofits could be\u00a0exempted from these advertising fees. They would effectively receive a 100 percent discount. Indeed, significant discounts for nonprofits and educational institutions are commonplace across the spectrum of internet services.<\/p>\n
\u00a0<\/p>\n
Finally, the group that may present the most significant issue for this proposal\u00a0are celebrities: movie stars, athletes, authors and musicians. One again, I\u00a0believe the issue of category discounts resolves this concern. Twitter could\u00a0decide not to charge these people \u2014 who for many Twitter users add value to the community \u2014 or to charge a lower fee (a specific discount for this category).<\/p>\n
Now, let\u2019s look at the alternative scenario, and assume corporations do not\u00a0have the same rights as people. Twitter can freely exempt all individuals\u00a0from charges. Here, Twitter could require corporations to pay advertising fees\u00a0based on their volume of followers, with fees starting when a firm has more\u00a0than 250,000 followers (or whatever number is deemed appropriate). In this scenario, discounts would apply, as frequently happens now online and offline, to entities that have a political, informational or non-commercial purpose (i.e.\u00a0news entities, political entities, governmental entities and nonprofits). The one\u00a0difference is that on Twitter these discounts would total a full 100 percent.<\/p>\n
Adding value for corporate users<\/h2>\n Next, Twitter could take a small piece of the large revenue increase discussed\u00a0here and create services that add additional value for these paying, large\u00a0corporate users. I can imagine a wide range of mechanisms that Twitter, with\u00a0access to its \u201cfirehose\u201d of data, could deploy to increase the effectiveness of\u00a0large businesses actively using its service.<\/p>\n
New services may be valuable, but are not necessary<\/h2>\n In recent years, Twitter has based its path to profitability on service\u00a0enhancements designed to increase user engagement and growth, and on a\u00a0transformation into a media consumption platform. Twitter\u2019s recent loss to\u00a0Amazon of its \u201cmarquee deal\u201d to stream NFL Thursday night games<\/a> casts an\u00a0additional shadow on this often-questioned media-related strategy.<\/p>\nAs an active Twitter user, I also can imagine a wide range of service\u00a0enhancements that would increase my engagement. For example, I simply can\u2019t imagine why Twitter is not the premier source for an automated, real-time feed\u00a0of the personalized news topics that meet my interests. The existing \u201cNews,\u201d \u201cTrends\u201d and #search features fall short of satisfying this craving. However, issues associated with creating more engaging features are outside the scope of\u00a0this article.<\/p>\n
Nonetheless, new service features, while desirable, are not needed for Twitter to\u00a0achieve far higher profitability: A radical shift in its revenue model will enable\u00a0Twitter to achieve the profitability it merits. Twitter\u2019s existing user base already delivers enormous marketing and advertising value to businesses. To date,\u00a0Twitter, in contrast to other media, has not sought to capture an appropriate\u00a0share of the value its service creates for businesses benefiting from the\u00a0use of its platform.<\/p>\n
Jack, give me a call<\/h2>\n Jack Dorsey, we have never met, and you probably resent people like me\u00a0suggesting ideas that no doubt you have considered and rejected. But, let\u2019s face it: Your business is not improving. You are at a crossroads: You can be Yahoo\u00a0(without a buyer) or a reimagined business, with Facebook-like potential. I\u00a0suggest you choose the latter. Let\u2019s talk.<\/p>\n
\u00a0<\/p>\n
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Article source: http:\/\/feedproxy.google.com\/~r\/techcrunch\/social\/~3\/Ss90WbVNUR8\/<\/p>","protected":false},"excerpt":{"rendered":"
Bruce Judson is a bestselling author of books on business and public policy strategy in the evolving digital era. He is a senior IoT adviser at Tern PLC. For better <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[10,7,14,15,6,12,11],"class_list":["post-4909","post","type-post","status-publish","format-standard","hentry","category-latest-update","tag-computer-news","tag-downloads","tag-microsoft-download-news","tag-networking-updates","tag-technology-update","tag-wordpress-plugin-download","tag-wordpress-theme-download"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t
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