Twitter “Likely” To Test Subscription Options This Year As COVID Shrinks Ad Revenue, CEO Says

By 07/23/2020
Twitter “Likely” To Test Subscription Options This Year As COVID Shrinks Ad Revenue, CEO Says

Twitter is in the “very, very early phases” of exploring subscription options to add a revenue stream not reliant on ads, CEO Jack Dorsey revealed during the company’s second-quarter earnings call.

Users “will likely see some tests this year,” he added, stressing that there is “a really high bar for when we would ask consumers to pay for aspects of Twitter.”

This development comes as Twitter, which relies on advertising for the majority of its revenue, has been significantly affected by “lower global advertising demand due to COVID and civil unrest,” Dorsey said, per CNN. (Twitter has seen spillover from a civil rights ad boycott targeting Facebook.)

The platform posted second-quarter earnings of $683 million (versus a projected $702 million) and a net loss of $1.56 per share. $562 million of its revenue came from ads–a 23% year-over-year drop from the $727 million it earned in Q2 2019.

Dorsey didn’t offer any details about what Twitter users might be asked to pay for. We do know that Twitter has reportedly looked into subscriptions before; in 2017, it was apparently considering a “more enhanced TweetDeck” aimed at corporate users like brands and media publishers. Development materials show it was tentatively priced at $19.99 per month, and offered features like automated cross-posting to other platforms, more list-making and search-sorting tools, and detailed analytics.

Also worth noting: Earlier this month, Twitter posted a job opening seeking a person who would build a subscription platform codenamed “Gryphon.”

Dorsey did seem to indicate that subscription options would allow for some content to be paywalled: “We want to make sure any new line of revenue is complementary to our advertising business,” he said, adding that Twitter believes “there is a world where subscription is complementary, where commerce is complementary, where helping people manage paywalls is complementary.”

While Twitter came in under revenue expectations, it saw an unprecedented spike in user growth. Daily active users went from 164 million at the end of Q1 to, now, 186 million (versus a projected 176 million). The 34% quarter-to-quarter rise is the largest Twitter has ever experienced.

The company’s stock price jumped 4% following the report.