Submitted by chartr t3_yl5gml in dataisbeautiful
Comments
stellarinterstitium t1_iuxeqks wrote
I think they need to recognize that the platform itself is not the value of the offering, it's all the people who participate/provide content. Because of this, there should be a minimal expectation of massive returns. Why should the people providing the value do the paying to support high returns for billionaires?
The platform only fails against the weight of unreasonable expectations for high margin returns from minimal value added. Private ownership should able to filter out these unreasonable expectations that primarily come from the rent-seeking investor class aka Wall St.
Operating cost cuts are fair game to increase this margin, but not at the expense of reducing the quality of participant submissions, which erodes the value of the platform if not protected.
Beansilluminate t1_iuy70gp wrote
You can say this about any social platform though.
Same thing for Facebook and it was able to print money for a decade
JCPRuckus t1_iuyfgr3 wrote
Facebook lets you connect to your family/friend group. Twitter is random people either quipping or yelling at each other. There's just less value there.
stellarinterstitium t1_iuyq1k2 wrote
And it's a lot of work filtering out the garbage, because algorithms foist whatever there business model wants upon you inspitenofnyour best efforts. Facebook has this problem too, however.
stellarinterstitium t1_iuypshz wrote
Yes. So much so that they tripped over the moral hazard of spending the windfall on the VR boondoggle.
ItWouldBeGrand t1_iuz3wyk wrote
Because the service is as valuable for the high profile users as it is for the business.
phdpeabody t1_iv0h5s5 wrote
All the people participating would argue the platform is the value. So in business, Twitter provides utility value, in that the technology is capable of providing services to the customer, as well as network value, in that the number of customers participating in those services provide a unique value to the customers.
The customers provide neither of these values to the service.
BorderlineCreative t1_iuxw4xz wrote
Your best bet is to lower your own expenses and rely on AD revenue. You start making people pay for the service and they’ll just leave to another competitor who makes they money off of data mining. All it will take is for Elon doing something super fucked up and enough celebrities to leave twitter to a new competitor that appeals to the younger generation and it’s done. He’s not making his 44 billion back anytime soon and definitely not be the time a competitor starts up that lures in user base.
phdpeabody t1_iv0gws2 wrote
One thing this chat isn’t looking at?
Would Twitter still be collecting 90% of the advertising revenue, if 10% of the people were paying for their subscription. Or even better, would they still be collecting 100% of the revenue, with non-subscribing users just seeing 10% more advertising.
skantanio t1_iuxnx33 wrote
Yeah 8 seems like kinda an arbitrary number, so I feel like they put thought into it. But then again, it’s Elon, so I wouldn’t doubt he didn’t have the foresight to even do a mental multiplication to see if the magnitudes line up (couple hundred thousand verified users * not even 10 dollars = a few tens of million dollars = like 0.0002% of what he spent on Twitter overall)
catesnake t1_iuywcxe wrote
Paid creator content. Essentially the Onlyfans model just without the porn. Okay, less porn.
Tisk_Jockey t1_iv13ysf wrote
Maybe his model is “more porn”
Mattie725 t1_iuyxvux wrote
Step one is not profitability. It's cleaning up the platform.
I don't understand why people ignore the reasons Elon literally gives. (just kidding, I do understand - don't agree- people just want to hate anything he does...) There is, or Elon believes there is a massive bot problem. Verified accounts will be more prominent. No scammer is going to pay 8$ a month for each of his thousand bots so they get pushed down.
Now, am I a fan of pushing down actual people who don't want to pay? No. But can we please stop ignoring the legitimate parts of his reasoning?
DaBIGmeow888 t1_iuzap60 wrote
Cutting jobs and increasing prices while overpaying for Twitter and getting in debt... Is totally about profitability.
ArkGuardian t1_iuznon9 wrote
It's not 8$ to use Twitter - only for services which include verification. A scammer doesn't use or need those services.
chicagotim1 t1_iuxaeom wrote
It looks like you are not considering ad revenue from un-paid non "verified" active users which would still presumably be the main income stream.
amadmongoose t1_iuyoaqh wrote
The graph is kind of hard to read, it shows current revenue on the left and new revenue on the right, aka total new revenue would be current+new. Since new is <2bil and current is 5bil you are right, it would still be a significant uplift however.
chicagotim1 t1_iuyq1v2 wrote
Oh you're probably right. Its incremental potential revenue
Soswix t1_iuy7oia wrote
Who will pay 8$ per month for that shitshow? 😂 I dont even use it for free 😅
Beliyat_Baron t1_iuyrtiy wrote
I wouldn't use that shithole even if Twitter paid me $8/month to use it.
Lumpyyyyy t1_iuyyevk wrote
I wouldn’t use it if they paid me $8/hr
chartr OP t1_iuwjlv5 wrote
Thought it would be worth looking at the proposed "freemium" model from Musk and co.
Originally wrote this in my newsletter here.
Source: Twitter
Tool: Microsoft Excel
hollow-_-logic t1_iuys9xh wrote
This is very well designed!
Sea-Bodybuilder-8663 t1_iuxynej wrote
I thought:
$8 was to be a 'verified'/blue check user; he had dropped from $20
Verified users were 'blue check' users, essentially content creators paying to be on the platform (as an authentic user, verified);
Why is the "Hypothetical new revenue" the same color as the AD revenue?
Was the point to show that even at Max subscriptions the main revenue is still ads?
darthshadow25 t1_iuwllaz wrote
Thanks to taking it private, he doesn't have to worry too much about profits. So he is probably going to reduce the profit margin by a bit. Also, it seems he is interested in cutting some fat from operating costs, so maybe that will help out too. So long as we see fewer ads, I'm all for it.
eohorp t1_iuwn9dx wrote
He wants to increase ads though, you only get half the ads if you pay $8. He also said he wants to make ads feel like content. Oy
darthshadow25 t1_iuwnjk0 wrote
I haven't heard about him wanting to increase ads. And I don't think I like the idea of ads feeling like content, unless that means the ads will be taking a less predatory form, and therefore feel more genuine, but that's certainly not going to be the case.
eohorp t1_iuwo8wm wrote
He made a twitter post a few days ago saying he wants to increase ads, but he wants them to feel fun or relevant like content. Whatever that means.
Alert-Elk t1_iuwqhqp wrote
I want to eat cake and cheesesteaks all day and also lose weight and have good cholesterol numbers.
DualtheArtist t1_iuyikxa wrote
Dude, goddamn.
You're a visionary.
This is how you do it everyone!!
HieronymusGoa t1_iux4ca4 wrote
and twitter ads were already the ugly children of fb/insta- and sem-ads. advertisers are already fleeing twitter and theyll probably not be coming back. unless they are breitbart or smth :)
darthshadow25 t1_iuwocbg wrote
Must have missed that Tweet. I'm not following this religiously.
eohorp t1_iuwrkhh wrote
Me neither, but I use Twitter and follow him, was kinda hard to miss.
darthshadow25 t1_iuwsv5l wrote
I don't follow him and rarely use Twitter.
eohorp t1_iuwva5b wrote
Well there you have it
dex3r t1_iux71l6 wrote
He is not the sole investor, I'm not so sure if they won't be anxious about not turning profit. Actually, I'm sure. They will be anxious, even more than before.
RustyShackleford2525 t1_iuxc8ji wrote
Wait until he hears about board members and that they can shitcan his ass if he does not outright own 51% of the company. I love business.
dex3r t1_iuxcqlb wrote
I'm assuming you are talking about darthshadow25 not Elon 😅
chicagotim1 t1_iuyqb37 wrote
His co-investors will be the other board members, and presumably they agree with him or else they would not have joined the venture.
wingman43000 t1_iuwrxoe wrote
>Thanks to taking it private, he doesn't have to worry too much about profits
His investors probably feel otherwise
darthshadow25 t1_iuwt0fk wrote
I thought he took it private, so he owns it in his own name. So he would not have a fiduciary duty to extract maximum profits like he would have if it were public.
jadero t1_iux3geq wrote
He took it private, but he did so with the help of others. It's not just his money on the table.
chicagotim1 t1_iuyqg74 wrote
He has other investors who went along with him, but since they joined him, they presumably agree with what he's doing
supified t1_iux95vu wrote
My understanding is there just arn't profits, twitter is operating at a loss. A problem he maybe making worse. I'm not sure how long he'd be willing to foot that sort of bill.
Dr_Adequate t1_iuynnvs wrote
> he doesn't have to worry too much about profits
The interest on that $44B he borrowed would like a word with you.
darthshadow25 t1_iuynsra wrote
I didn't realize he borrowed it. I thought it was his money.
Dr_Adequate t1_iuypa85 wrote
Yup. And I saw another chart earlier that may show what's behind his thought process. For other large social media companies, the revenue-per-employee ratio is big, something like $1MM per employee, while for Twitter it's about half that, $500k per FTE.
Which is likely what's driving his desire to fire so many. If he can keep it limping along with a lower headcount, the revenue-per-employee goes up, and he can say he's just as smart as the people running other large social media platforms.
leg_day t1_iuzkbtp wrote
4% paying $8/mo doesn't even cover the interest payments on the leveraged buyout.
bamboozled_bubbles t1_iuy6yxq wrote
The danger of a purely ad-based platform is that the entire incentive structure is based on volume of impressions/engagement which conflicts with aiming for credible content. If charging celebrities $8/m means they can afford to govern the platform better, maybe it’ll work.
ArkGuardian t1_iuzo72y wrote
How many celebrities do you think there are? A significant portion of the user base has to opt in for this to work. Granted there are businesses that have been successful in getting significant portions of its audience to opt in to payment for features over ads, but Twitter needs a really compelling value prop for people to do that
NewEcho2940 t1_iuz0i96 wrote
THIS is a fantastic chart.
windigo3 t1_iuz3p9u wrote
What’s the analysis of their ad revenue if three quarters of the users stop using the app?
M3rkaba- t1_iv15i21 wrote
Need a bunch of ideas and see what sticks! New features and revenue ideas. Must find profitability and maintain it. Must increase & diversify revenue streams. 4% users, $8/m= $1B! Subscription tiers is confirming 'value in the "Blue Check" - via journalists, big business, celebs, politico's, etc.
the_scign t1_iv1a7aj wrote
Looking forward to seeing how they get all the bots and fake accounts to pony up.
Penzare t1_iv22huk wrote
There is absolutely no way in hell over 2% of users will pay any amount of money to be verified. Not a chance. The graph should have been in smaller increments.
AmbitiousBasket0 t1_iux4oig wrote
Freedom of speech as a service
boogrit t1_iux1cnu wrote
Damn. Crazy to look at the numbers laid out like this. Charging for a check mark for verified users is just a drop in the bucket looking at the big picture. A subscription-based system may not be the best way to profitability... but what other options are there?