Quotulatiousness

December 20, 2015

Are you the customer or are you the product?

Filed under: Business, Media — Tags: , , , — Nicholas @ 02:00

Howard Tayler explains why he’d be willing to pay real money to Twitter for the use he gets out of the service and in the process, change from being a product to be resold into an actual customer:

Facebook’s actual plans were far more problematic. At a high level, the plan was to monetize their user base as a product, rather than as customers. This meant selling the product to OTHER customers — advertisers and market research firms, for starters. I don’t mind being advertised to, but in order for the monetization to work, Facebook had to step into our feeds and adjust the content we were seeing.

Facebook became less useful to us, and this loss of utility was hidden much of the time. When we actually noticed it, it was status quo.

Twitter is doing similar things to monetize their user base. The insertion of Promoted Tweets is the most immediately intrusive, but recently they’ve begun mucking with our timelines in order to adjust the content we see.

Look, I get it. These companies are providing an exceptionally valuable communication service to hundreds of millions of users. They deserve to be paid for that. The question is, what’s the best way to pay them? What will make them the most money, while keeping their users not just happy, but loyal?

Twitter’s 2014 revenue was $1.4B. They have over 900 million users, but most of those users do not tweet things. If we assume, conservatively, that there are only 100 million human beings actively using Twitter’s service, they were worth $14 each during 2014. Much of that money was paid in by advertisers.

$14 isn’t much. It’s less than $1.20 per month. I would cheerfully round up, and pay $20 for an annual Twitter membership without batting an eyelash.

For that money I would obviously expect to NOT be monetized further. Don’t market to me, don’t promote Tweets, don’t mess with my feeds. Maybe give me instead some cool tools that let me better manage this awesome communications tool.

If those 100 million users were willing to pay $20/year for “Twitter Prime,” Twitter’s revenues would be $2B. It’s not beyond the pale to further assume that their profit margins would be better, since all the overhead that goes into making a useful advertising engine could be dust-binned. Additionally, Twitter would become far more valuable to its users (who are now CUSTOMERS,) and they’d attract more paying users pretty quickly.

My ISP is Rogers, and I’ve been a customer for more than a decade. I use their web client for my personal email most of the time and it’s part of the services I pay for. At some point, Rogers decided that they needed to take over part of the screen to advertise at me. That was what finally induced me to install AdBlock Plus in all of my web browsers. Had the email been a free service, I wouldn’t have objected, but I was paying real money for it and chose not to be subject to having to put up with animated ads every time I needed to read or write an email message.

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