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Of celebrities, non-business models and the Twitter tax

Monday, 23 February 2009 — by

TwitterDell used Twitter to make $1 million from discount vouchers. Iterative. Twitter consider charging for extra features. Iterative. But which is the odd one out? The former story is boring, because you’d expect that from Dell. While the latter is interesting, because Twitter would end up like FriendFeed, but charging for the same thing — now there’s something to Tweet about…

The thing is, if Twitter start charging for their service, then they’re going to have to offer a lot more value than audience and API, or those that are being asked to pay for Twitter usage will find other, smarter, “under the radar” means of using Twitter.

Think of it this way, if you were a large business or a celebrity and Twitter suddenly asked you to pay for what was formerly free, wouldn’t you expect more tools and options? I know I would.

Most famous people and businesses of a certain size have PR people, who are amongst some of the most adept social networkers out there. They could easily masquerade as your Average Joe and spew forth Tweets for their clients without attracting the interests / attentions of the Twitter tax collectors.

FriendFeedApparently, over in Japan, their version of Twitter has groups that people can use to organize their followers. FriendFeed has that, amongst other things. At the very least, you want that kind of functionality — and here’s where the wheels will come off the Twitter money making machine.

Right now, FriendFeed is a social network with some wonderful features and vast potential, certainly far more than Twitter offers .. and it’s also free. So if you’re the guys behind Twitter, how the hell do you justify charging for your service? They really have only two selling points; 1. the size of their social network, and 2. their comprehensive API, which has given rise to lots of 3rd-party tools, applications and services.

Sure, those are two good points to have, but in this day & age, they’re easily replicated.

The rise of the web celeb’ and the death of internet advertising

Twitter is an exceptionally simplistic service. As I’ve mentioned before, Twitter isn’t Jesus, and is little more than the bespectacled ginger-haired half-cousin of the Facebook status update, but with a smaller character allowance.

The very reason Twitter has recently risen from relative obscurity to notoriety is because famous people like Stephen Fry and Jonathan Ross (feel free to add your own non-Anglicized celebrities here) added some credibility and dignity to using something like Twitter, which had previously been the domain of people like me. And in fairness, Twitter is a slightly more sophisticated text messaging service, like you get with your mobile phone.

Now, for Twitter to make money, in time, they’re probably going to start charging the Stephen Fry’s and Jonathan Ross’s of this world. Problem is, these are people who have gravity (Mr. Fry has gravitas, but that’s not the same thing). When I say gravity, I’m talking about the unseen force / attribute of drawing people towards them, like some swirling vortices of influence.

So let’s imagine both Stephen Fry and Jonathan Ross were so annoyed at being charged for using Twitter, they upped sticks and vacated the building. Do you think that would be the end of the matter? No. Not by half.

A lot of people started using Twitter because they were offered a genuine chance of connecting with these guys on a personal level — that’s something not particular to Twitter, which some people make the massive mistake of thinking. These people have no loyalties to Twitter. So if Stephen Fry and Jonathan Ross left, I’d be willing to bet my pound to your penny that a good percentage of those very same people would follow soon afterwards.

There is a caveat to this, in the form of a time statute. People being people find other people. So in time, some people would decide to stay. As has been the case with most social networks, name-dropping works wonders. FriendFeed has itself a Rob Scoble and Plurk had itself a Leo Leporte.

So why would Twitter charge people and not just drop in adverts? Because the bottom has fallen out of internet advertising, and most people suffer from ad’ blindness anyway.

So if Twitter is populated predominantly by people who’re too lazy to communicate, the guys behind Twitter are faced with a quandary: does adding new features add value or does it add the kind of complexity that will annoy the “purist” Twitterers?

Dilemma.

The big question on everyone’s lips will be: “why start charging now?” followed by: “and what am I paying for?” followed by: “but FriendFeed / Plurk / [insert name of other social network here] doesn’t charge!” or more worryingly for Twitter: “[insert name of celebrity here] has left! They’ve gone to [insert name of other FREE social network here]!”

Of course, this is pure “What if?” speculation on my part. But wouldn’t it be deliciously ironic if Twitter became a victim of the very force that made it a success in the first place…

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CPB → Monday, 23 February 2009 @ 13:50 BDT

This world has been addicted to free things. To tell you all the truth.. Nothing in this world should be free.. There will always be charges to what you do. You cannot sacrifice for the rest of your life doing something free for the people. Learn to help those great developers.

Heidi Cool → Thursday, 26 February 2009 @ 22:28 BDT

What it comes down to is the value of Twitter is based on both the features and on the community.

I happily pay for Flickr because it provides a service that is far more efficient than hosting my own photos, and the social component is great for sharing and for finding creative inspiration.

I was also perfectly content to pay $20/yr for a pro-account on Pownce because the features were stellar and I found there a community of exceptional designers, developers, photographers and others (including yourself) with who I could share ideas and best practices in addition to fluff and nonsense.

With the demise of Pownce I now use Twitter everyday. The feature set isn’t as robust as Pownce, but it’s where the people are that I wish to follow. If they all suddenly moved to some new service I’d need to follow them there. I’m already using a variety of services, and the communities are different on each (though there is some overlap.) For each service my requirements are that the service fills some need and is populated by people relevant to the way I use the service.

What I don’t know is how one puts a value on that. Flickr and Pownce chose price points within reach of most users, the cost per day of usage is quite insignificant so deciding to go pro was an easy choice. Basically it’s a bargain. If Twitter and other services start charging, they’ll need to keep that in mind. I’ve heard people talk of pricing of $5 -20 or more per month. While that’s not a lot for something one uses often, it adds up if you’re already paying more than that for Internet service, mobile phones, etc.

Such numbers make one ask if it’s worth it or not. Each of us will value this differently depending both on our income and our usage, but I think the key would be to set a price point that doesn’t create an entry barrier for the average user.

Also I’d follow the Flickr model of having a free version with more limited features. I’m not sure how that would work with something like Flickr but given the learning curve new users face in exploring social media having a free option for them to try is a good way to introduce them to the benefits of the service.

Sorry Comments are close. Quite possibly for a good reason. Share your thoughts on some of my other posts or contact me directly.

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