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Apparently A Debate: Would Twitter Benefit If Users Had To Pay To Use It?

from the easy-answer dept

Tue, Jul 24th 2012 7:51pm — Timothy Geigner

According to Mathew Ingram at GigaOM, there is apparently a raging debate over whether or not Twitter would actually benefit as a service if users had to pay to use it. I'll admit to being a little bit surprised when I saw this, but digging into the details brought what I think is a wonderful conclusion as to why the answer is definitively "no".

This all more or less started (or at least really took off) when Dalton Caldwell, who founded Imeem, announced he wanted to create a for-pay service similar to Twitter. Caldwell states that services like Twitter don't realize their full potential in what he deems an "advertising-supported monoculture".

"All of these services are essentially in the same business: vying for the opportunity to sell you/your clickstream to advertisers. … I have no interest in completely opting out of the social Web. But please, I want a real alternative to advertising hell. I would gladly pay for a service that treats me better."

It's a concept that I think many people might first agree with...but only if they don't think about it for more than thirty seconds. The first flaw in this line of thinking is that users paying for the service is somehow a firm requirement to avoid what Caldwell calls "advertising hell". I don't think they do; rather, I think that each new service that comes out can be built upon and each innovation can make each service better, including in the way users are impacted by advertisements. As an example, Caldwell could have penned something similar in the 90's, bemoaning a Myspace that had clearly become a musical and bloated hell, so obviously we need to make a social media site that is paid for by users.

Except that's not what we needed. We needed Facebook which, contrary to all the status updates you may have read, does not charge users.

The second flaw in Caldwell's statement is the assumption that advertising does now and always will make us want to bang our heads against the walls in frustration. Certainly advertisements can be annoying, but we've talked repeatedly about how advertising is simply more content, and it can be good or bad. As digital ads continue to get better and better, this "advertising hell" may become an "advertising heaven." Or at least an "advertising purgatory," where the annoyance factor is minimal. In any case, if ads were wanted, then Caldwell's service loses out.

But perhaps that most articulate reason why a service like Twitter should not charge users to join in is made by venture capitalist Fred Wilson:

"Wilson maintains that a free model is the only way to get the kind of network effects necessary for a large consumer business. He also argues that charging users is contrary to the rationale behind such services, since the content being monetized is coming from those same users:

'When scale matters, when network effects matter, when your users are creating the content and the value, free is the business model of choice. And I don’t think anything has changed to make that less true today. If anything, it is more true.'"

What Wilson notes about the content being created by the users is the key point to me. Twitter is a great stage, but those of us that use it are the stars (to varying degrees). To charge the people who are creating the content on your platform seems completely backwards, particularly considering the effect that will have on how your service scales.

Consider the recent story we ran about how an Irish rail operator used Twitter to reunite a person and their dog: does that happen if you have to pay for the service, reducing its user base? I don't think it does.

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Filed Under: business models, communications, free, pay, social media
Companies: twitter

43 Comments

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Anonymous Coward, 24 Jul 2012 @ 8:06pm

The problem is that, like it or not, you do pay for the service. One would suggest you pay a fee and certain things would be kept out, and the other suggests you don't pay cash, but rather pay for the service with your attention to paid threads from companies tries to sell you stuff.

Either way, you pay.

Twitter today is a pay service. Sponsored hot terms are a great example. The free flow of ideas is corrupted by a commercial interest paying for space - and as a result, your use of that "free" service is paid by the fact that these things are on your screen.

Free is possibly the most overused term online, and most often it's just not true.
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MrWilson, 24 Jul 2012 @ 8:29pm

It's a great idea if you're looking to kill Twitter's userbase and thus make it obsolete.
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Ben Weatherman, 24 Jul 2012 @ 10:09pm

Genius of the And
These arguments often leave out a third option: allow both free & paid. Let everyone in to get the network effects, content creation, etc. But give your users the choice to upgrade to a premium account that adds 1 or 2 awesome features (like analytics) or removes some of the crap the mere mortals have to contend with (like ads).

Free AND paid.
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Anonymous Coward, 24 Jul 2012 @ 10:25pm

Re:
Yes...and?
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Anonymous Coward, 24 Jul 2012 @ 10:30pm

I long ago had it with ads. That's why you use a browser that will block that crap. How about free with no ads.

I don't use twitter any more than I use Facebook. Somehow the usefulness of limiting the amount of characters you can tweet in one go just doesn't appeal to me. Nor am I particularly wanting to know what someone ate for breakfast.

As long as I am in control of my browser it will see as few ads as possible.
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Anonymous Coward, 24 Jul 2012 @ 11:50pm

Adblock Plus!"Google" For the more tricky ones ad muncher "and Google" and if it is newer cpalead or clones just use Remove It Permanently "and yes Google again".. Really though you do not see cpalead on bigger websites like twitter lol..

I've not seen an ad in ages.. Even shit like hulu is easy to work around. "Cheat engine.. figure it out yourself ;) it's pretty obvious anyways.."
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PaulT (profile), 25 Jul 2012 @ 1:05am

Re:
"Either way, you pay."

Ah that old rubbish. Everybody understands that free items are paid for somehow. But, people making this point always seem to get caught up in semantics rather than addressing the actual point - people are far more willing to to pay with things other than money than they are to part with cash. Pretending that doing so suddenly stops it being free is to focus on a definition of the word that most people aren't referring to.

"Sponsored hot terms are a great example"

I literally had to look and find out what those were as I never see them. Then again, I'm interested about what people I follow on Twitter say, not some random suggestions from someone I don't know.

"The free flow of ideas is corrupted by a commercial interest paying for space"

I have no idea what you're getting at here. Are you saying that Twitter's free information flow is interrupted because there's some sponsored links hidden away where many people never look? What a crock.

"Free is possibly the most overused term online, and most often it's just not true."

What did you just pay to make that pointless comment without any monetary outlay? Why did you choose to do so?
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Richard (profile), 25 Jul 2012 @ 2:10am

Ads
There is a huge fallacy going around here. It is the belief that advertisers actually want you to be subjected to annoying ads. They don't. What advertisers want is to serve up ads only to the people that will respond to them - and those people, by definition, are not annoyed.

Think about it for a moment - surprising as it may seem, the user and the advertiser actually share an interest here.

If the service could serve up only the ads you would respond to then that would suit you and the advertiser just fine. The total volume of ads would be much lower and everyone would be happy. Companies like Google are trying to move in that direction - and I have to say they have made some progress. Next time you are about to complain about comapnies gathering data on your online habits just think about that point. The targeted ads I see on the net are already less annoying than the untargeted ones that appear on TV.
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Beech, 25 Jul 2012 @ 2:11am

1.) I Don't use twitter. Never really appealed to me.
2.) I do use ad blocker +. It is a beautiful, beautiful thing.
3.) That said, I think a LOT of people would stop using twitter if they needed to put in a credit card number. As our trolls constantly remind us, people "just want everything for free." I would add "especially when they've been getting it for free all along" to the end of that quote as well. Look at the story about the Red Cross' 2 cent donuts from yesterday.
4.) I think the majority of the population knows that an ad supported is "free as in beer." You could make the same "but it's not really free" arguments about over the air television as well. Most people are content calling something free if they can use it without opening their wallets.
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Anonymous Coward, 25 Jul 2012 @ 2:51am

Re:
You know, techdirt talks about this very thing all the time.

How things are "free" but still make money is a big part of what techdirt is about.
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Anonymous Coward, 25 Jul 2012 @ 2:54am

Re:
Yeah it's the kind of thing you only use because it's free from the user's end of things.

I mean, who the fuck would pay for microblogging except for advertisers?
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Anonymous Coward, 25 Jul 2012 @ 2:57am

Re: Genius of the And
I see a lot of sites that do this, and I applaud those who give customers a choice in how site monitization affects them. Of course this is only if they don't go full retard and make the ads on the "free" version in your face annoying.
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Anonymous Coward, 25 Jul 2012 @ 3:02am

Re: Ads
You mean like lesbians being shown ads for trojan condoms?

Men seeing ads about women who feel not so freash down there?
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Richard (profile), 25 Jul 2012 @ 4:04am

Re:
Actually ad supported (if done well) is better than pure free - because the ads themselves are a positive value to the user. It is only a "cost" if done badly - and then it is of little value to the advertiser either.

Those of us who have hobbies are well aware that the adverts in specialist magazines and websites can be a major attraction in themselves.
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kenichi tanaka, 25 Jul 2012 @ 5:24am

Twitter is an aging dinosaur. The minute they start charging its users to pay for their service, they'll find something new. You cannot go from free to fee and expect people to pay for the service. Considering that the majority of users sign up for an account and then abandon it ... I don't see this surviving.
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Anonymous Coward, 25 Jul 2012 @ 5:33am

I wonder how long the ad-supported free service world can last as long as AdBlock and the like continue to grow in popularity?
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Anonymous Coward, 25 Jul 2012 @ 5:33am

The other point...
The point Tim touches on briefly but doesn't fully explore is that the advertising model also can evolve to the point where it no longer is a "hell". The biggest example of this can be seen in the most expensive advertising space on the planet - the Super Bowl - where a significant number of people (many of whom don't even particularly like football) tune in to watch the ads rather than the game itself.
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zcat, 25 Jul 2012 @ 5:42am

Re:
This;

https://adblockplus.org/en/acceptable-ads
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Brent (profile), 25 Jul 2012 @ 6:37am

I am a little baffled by the argument. Are we in some other economy than the one i read about on a regular basis? How would users paying for any currently free service suddenly benefit that service (when doing so would drop the service's usage rate down to probably around 10%) or more appropriately, who, besides the super rich, would believe that argument?
It steps dangerously close to what mobile carriers are/were wanting to do in terms of making their internet a 'smart pipe' and being able to charge their customers for each app/service they use instead of a single, constant monthly bill. I know this argument is on the basis of Twitter charging directly but the fact that an argument about charging consumers for a service that relies on consumer input can get any support is baffling to me. How well would our election system work if there was a fee to vote, or even a fee to vote for each category.
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art guerrilla (profile), 25 Jul 2012 @ 7:12am

1. while i *suppose* there is some 'value' in twittering twits and their twee tweets (although i'm pretty sure the 'revolutionary' usage of twitter is about .00001% of all tweets); i'm certain it is just like 90%+ of all cell phone calls: useless ego-twaddle...
as a public service to the NSA, here are 90% of all cell phone calls:
Hey man, what are you doin'?

nuthin', what are you doin'?

nuthin'...

you goin' over to jimmy-joes later ?

why, what's he doin' ?

nuthin'...
(continue ad nauseum...)

2. i am not sure where this new meme of 'good ads = good content' is coming from, but i disagree 1 000 000%
sure, there are about 1 in a 100 ads which are amusing, but i do NOT want to sit through 99 ads to get the 100th 'good' one...
the only 'good' ad, is one i don't see/hear...

besides, *even if* the 100th ad is funny, it is ONLY funny about 1 or two times; the other billion times i see/hear it, it ain't funny no mo'...
in short, ads are NOT about 'educating' or 'entertaining' consumers, they are about creating anxiety and brand loyalty...
the whole lot of (m)ad men, marketing droids, and -hell, why not- 'Human Resources' personnel can fall off the face of the planet, and it would be a better place...

art guerrilla
aka ann archy
eof
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Wayne, 25 Jul 2012 @ 7:32am

Ok, maybe I am missing something, but what the heck are you people talking about? I don't use twitter to post much, but I follow people,and post occasionally. What AD hell are we talking about?

I just looked and to be honest, I can find or see NO ads whatsoever. Maybe I am missing something here but this appears to be a non issue.
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Wally (profile), 25 Jul 2012 @ 7:38am

AdBlock Plus
Ok, this will seem like a SPAM or product bump, so I apologize in advance.

"This all more or less started (or at least really took off) when Dalton Caldwell, who�founded Imeem, announced he wanted to create a for-pay service similar to Twitter. Caldwell states that services like Twitter don't realize their full potential in what he deems an "advertising-supported monoculture",".

There is a much better alternative to making those advertisements disappear through making people pay for their tweets. It's something I've used since Firefox Version 2.5 . It's a free adding called AdBlock Plus. It gets rid of the banner and flash advertising space in the HTML code of the page before the page downloads completely to your browser cache. It's currently availible for Firefox, Chrome, Opera, and Safari.
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Wally (profile), 25 Jul 2012 @ 7:40am

Re: AdBlock Plus
*add-on
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Wally (profile), 25 Jul 2012 @ 7:55am

Re: Re:
"Actually ad supported (if done well) is better than pure free - because the ads themselves are a positive value to the user. It is only a "cost" if done badly - and then it is of little value to the advertiser either.

Those of us who have hobbies are well aware that the adverts in specialist magazines and websites can be a major attraction in themselves."

This sort of all goes to mush when you realize that 99.9% of the ads online are phishing scams. Not to mention sometimes Flash takes a lot of resources on some computers and generally gets in the way of actually using the site. "Click here for our product before you browse the site". Some ads even tend to hijack the browser until you click on the advertisement.

*speaks in sarcasm, rolls eyes, tilts cigar out of mouth in Groucho Marx fashion*
Why yes, it's definitely appealing for people browsing the web to get their information stollen, their browser's hijacked, get blasted in the ears about a free something or other product they've "won", and to have their computers slowed down by TONS of flash banner ads running at once.
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gnudist, 25 Jul 2012 @ 9:25am

Re: Re: Re:
Good sites (penny arcade) actually check the ads to see if they're legit.

In PA's case, they make sure to only do ads for things they would want.
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Milton Freewater, 25 Jul 2012 @ 10:22am

I see Twitter and Facebook as free communications apps for my Internet hookup. If I had to pay to use them I'd communicate some other way. I heard there used to be something called "electronic mail" that could do this. If only there were some kind of "list service" or online "bulletin board" I could use as an alternative. Etc. etc.

For that matter, I think of the World Wide Web in general as a free app for my Internet connection. I pay Comcast for it when I choose broadband over dial-up.

As for the ads, I'd rather people create targeted advertising than be unemployed, sucking up my tax dollars and competing with me for media work. I can ignore them easily enough. Sometimes I even *gasp* click on them.
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MrWilson, 25 Jul 2012 @ 10:27am

Re: Re:
And which advertisers would continue to pay for microblogging when all of the audience has left for other social networking tools?
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Miton Freewater, 25 Jul 2012 @ 10:31am

Re: The other point...
There is one enormous difference between online and TV, though. Everybody's TV is equally powerful in terms of playback, so it's easy on a technical level to make ads for a TV broadcast. The Internet audience owns a whole range of devices with a very, very wide range of speed and functionality. An ad that is a fun flicker on a state-of-the-art computer will crash an old computer, and every netbook, smartphone, etc. lies somewhere on that spectrum. In short, TV ads don't by definition make any of their audience miserable, but Internet ads by definition will always make roughly half their audience miserable.
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Renkluaf, 25 Jul 2012 @ 11:42am

Historically, new media (newspapers, radio, TV) have always been "paid for" by advertisers. Without that, no way to develop "programming."
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John Fenderson (profile), 25 Jul 2012 @ 4:06pm

As digital ads continue to get better and better

Wait... digital ads have been getting better?
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John Fenderson (profile), 25 Jul 2012 @ 4:09pm

Re: Ads
It is the belief that advertisers actually want you to be subjected to annoying ads. They don't.

If what you say here is true, then why do advertising companies fight every effort to let people opt out of advertising?

This goes all the way back to junk mail. Every time an effort is made to let people opt out of junk mail lists, advertising companies fight it like their lives depend on it, while at the same time saying that they don't really want to go to the expense and hassle of sending advertising to people who are just going to throw it away unread.

When someone's words and actions are at odds with each other, I believe the actions.
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John Fenderson (profile), 25 Jul 2012 @ 4:20pm

Re: Genius of the And
Yes, this.

When I think about it, I wonder why more companies don't offer paid versions of their services that let you avoid ads (and, much more importantly, avoid being tracked and spied upon). If Google offered this as an option, I'd probably use some of their services.
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John Fenderson (profile), 25 Jul 2012 @ 4:22pm

Re: Re: Re: Re:
But even well done, legit ads engage in tracking and other spying.
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John Fenderson (profile), 25 Jul 2012 @ 4:27pm

Re:
How would users paying for any currently free service suddenly benefit that service (when doing so would drop the service's usage rate down to probably around 10%)

Well, some users would benefit -- like me. Because I won't use those services right now, so regardless of the size of the user base, they have no value to me. But I realize that I'm an insignificant minority.

It steps dangerously close to what mobile carriers are/were wanting to do in terms of making their internet a 'smart pipe' and being able to charge their customers for each app/service they use instead of a single, constant monthly bill.

It's absolutely nothing like that. The carriers are trying to get paid for you using a product or service that they have nothing to do with, not one that they're providing. The service they provide is the bandwidth, and nothing more, and you already pay them for that.

That is very different than the provider of a service trying to determine the best way for them to get paid for their service.
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John Fenderson (profile), 25 Jul 2012 @ 4:30pm

Re:
i am not sure where this new meme of 'good ads = good content' is coming from, but i disagree 1 000 000%
sure, there are about 1 in a 100 ads which are amusing, but i do NOT want to sit through 99 ads to get the 100th 'good' one.

But you just proved the "good ads == good content" idea correct! You acknowledge that about 1% of ads are of value to you because they're funny (thus, they are good content). That 99% of them are awful doesn't affect that.
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gnudist, 25 Jul 2012 @ 7:30pm

Re: Re: Re:
It's kind of pointless to pay for microblogging if no one uses it.

It's like all those people who buy their kids things that wind up in the closet and wind up having little money bcause they spent it on garbage.
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gnudist, 25 Jul 2012 @ 7:40pm

Re: Re: Re: Re: Re:
oohhh scary buzzwords! EVERYBODY PANIC!

As long as they're not trying to sniff out my passwords or shit like that I don't mind as much.

And if there's a site you really don't want people knowing you visit you can jusy block all scripts and images used to track you. In fact the browser I'm on won't ever have those problems because it's text only. :P
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gnudist, 25 Jul 2012 @ 7:54pm

Re:
90% of everything is crap, including adverts
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Ninja (profile), 26 Jul 2012 @ 4:17am

Re:
First, I don't pay and I would not pay. Some advertisers pay for their costs and I use their service for free. Sponsored terms, suggestions or whatever are completely different from me paying. No, srsly, not a single cent from me has gone to Twitter.

Second, I also don't see the ads unless they are not invasive/annoying. I had TechDirt ads blocked a while back. When a new ad comes that annoys me I just add it to the block list again. Same with everything. So far only Google text ads managed to stay out of my block list.

Free is possibly the most overused term online, and most often it's just not true.

When you get a free sample it was sponsored by some1. It's still free for you though. So, uh, you fail.
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John Fenderson (profile), 26 Jul 2012 @ 9:23am

Re: Re: Re: Re: Re: Re:
As long as they're not trying to sniff out my passwords or shit like that I don't mind as much.

And that's great, for you. Lots of us do mind, however, and there's no reason to mock us for that.
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John Fenderson (profile), 26 Jul 2012 @ 9:26am

Re: Re: Re: Re: Re: Re:
Also, I'm not just talking about online ads, but advertising in all media. Using noscript or something doesn't help me in the local grocery store, it doesn't help me when using a credit card, etc.
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redleaf (profile), 26 Jul 2012 @ 9:47am

Myspace
Myspace was around in the 90's?
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Dark Helmet (profile), 26 Jul 2012 @ 12:50pm

Re: Myspace
It was not. That was an exaggeration on my part...
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