Twitter Blue and the Consumer Tech Subscription Dilemma

For years, the majority of tech companies—with their free-for-everyone, change-the-world, massive-reach mentality—led the resistance to digital subscriptions. 

When Apple started charging for digital music downloads, a whole industry of free-to-stream services popped up. When Facebook, MySpace, Friendster and the rest of the social media universe launched, they made clear they would always be free. 

The reality behind the scenes was, of course, different. All these companies—many of whom envied the rise of Amazon Prime—have explored subscription businesses. Here’s some of our past reporting on Facebook’s explorations. 

But in public they were hostile to the idea that things on the internet shouldn’t be totally and forever free. 

I know this firsthand. After I launched The Information as a subscription publication in 2013, my inbox filled with missives from prominent tech executives who said what we were doing was bad for the world. I vowed to name conference rooms after them—and I did so in my head—but I wimped out when it came to actually putting their names on the walls. I guess it’s never too late.

One major tech executive still refuses to give interviews to subscription publications despite the fact that the company this person leads has bet its future on at least three subscription products. 

At least one of those who complained in my inbox back in 2013 was an early investor in Twitter. And if you had asked me which of the big tech platforms would launch subscription businesses, I wouldn’t have guessed it would be Twitter, which has long put its mission ahead of making money. 

What a difference some activist pressure makes. Twitter this week made Twitter Blue available to Australians and Canadians. This $3 a month subscription service allows you to edit your tweets and put your bookmarks in folders (someone needs to explain the value of this to me), among other things. 

I’m sort of joking. I don’t think the product is wholly the result of Elliott Management breathing down Jack Dorsey’s neck. In fact, Dorsey has been in a pretty cool mode of rapid product experimentation, with Fleets and Spaces and Blue and Tip Jar and more. That’s exciting to see. 

But I’d offer one piece of advice for Twitter and all the other tech companies who want a taste of recurring revenue glory: Bolt-on subscriptions for consumer products are exceedingly challenging to execute. 

The best subscription products have two attributes: truly (not marginally) unique content and features, and simplicity. If you want the service or feature, you have to pay—period. Netflix is a great example of this model. You can’t watch for free. 

Every media company I know that has put up a metered paywall offering some content for free before asking for a credit card has dramatically reduced the free content to focus on subscribers. Simplicity wins. 

Enterprise software is an exception. Power users pay for more features. It’s a corporate expense. The free versions aren’t sufficient for most users, however, and the default is to pay.

Consumer software doesn’t have that luxury. To compete against free services like Facebook, TikTok, Instagram and so on, Twitter can’t reserve its best features for paying users. That would hurt engagement.  

So it only charges for marginal features. Journalists care about editing their tweets. Politicians may too. Not many others do. 

Offering a collection of marginally useful bolt-ons won’t yield meaningful revenue for Twitter, I fear. Perhaps that’s OK. Blue isn’t a bet-the-company kind of move.

The best path for a consumer tech business and subscriptions is exactly what OnlyFans and Substack are pursuing: Provide a platform for lots and lots of subscriptions. Twitter, which recently bought newsletter platform Revue, knows that. Now let’s see what the company does with it.