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Twitter’s Free to All Model is Wrong

I am going to write something that is likely to be unpopular. Today I experienced a “perfect storm” of sorts regarding the Internet and the idea of free is good. This apparent entitlement mentality that is pervasive among Internet users that everything should free is going to potentially ruin a lot of good opportunities. Of course, all of this is in my opinion so you can take it for what it’s worth. At least reading it is free, right?

Twitter Birds, Close Up

Image by DBarefoot via Flickr

This week I have encountered SMB (small and medium business) people who love the idea of Internet marketing but they don’t think that they should have to pay for it. I have read that free services suck because you can’t get service when something breaks or fails. I have been doing free seminars for some folks for over a year but have closed nearly zero business from it (this last one may be because I just didn’t do the right things to make them a customer which I can accept).
So free is in but for how long? Two of the most prolific Internet properties that are currently getting a serious amount of attention from business are Twitter and Facebook. They are both free to use. I am beginning to think that Facebook has a better mousetrap due to a wider breadth of services it ties together, but that’s for another post. One thing that Twitter has is a ton of hype. This hype appears to outpace reality on a consistent basis. I think any stumbling blocks that Twitter is encountering is due to one facet of the service: it’s free.
So should Twitter charge for the service? Here’s a few things to mull over.

  1. If Twitter were getting more people who actually used the service rather than signing up and then not using it within a month it would have more value. It may have a lot less users but it would be the people who actually get it. So how to you separate the wheat from the chaff? Make the service a paid one. Not much. Let’s just say $24.99 per year. Just over two bucks a month. I would spend that in a heartbeat for Twitter. Why? Because I see the value and I would think that 2 bucks a month is a steal. Some quick math for you. If 50% of the 18 or so million Twitter users decided they would pay for the service at $24.99 per year you now have revenue of just under, gulp, $225 million. With overhead being as small as it is for Twitter you have plenty of profit, plenty of cash for R&D and even more for infrastructure. Oh and you also get 9 million users with skin in the game so they now become much more valuable to advertisers.
  2. If Twitter had revenue, it could quit wasting time with everyone speculating how they were going to make money to survive and then just develop very cool ways to apply the service to businesses for their benefit.
  3. If Twitter charged for use and could provide customer service. Nothing else needs to be said there.
  4. Back to the R&D thought. If Twitter was making money it could work 24 / 7 to improve its search capabilities.  Many believe search is the true potential value of Twitter anyway. Think of the paid search model around highly targeted and engaged Twitter users based on keyword. The cash registers would ring a lot.
  5. Twitter as a paid service would eliminate a lot of the noise. There would be less mundane reporting because users would have skin in the game.

I say all this because, while it’s not as sexy as Twitter, LinkedIn is looking to be profitable for its second year in a row. That’s right. Profit. No matter how many characters you get to make that point it’s something that Twitter may never realize. Sure that’s a strong statement but why not? Twitter is burned into everyone’s brain as a free service and I suspect it may be too late for them to get back to where they need to be.
Look, I could be wrong here but one thing I am sure of. If anything is put out as free you will get what you pay for. To expect more and, even worse, to think that you shouldn’t have to ever pay for any Internet services is ridiculous. Would you just give away your product or service? No, of course not. So why do you think that Twitter should?

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  1. You make some good points about Twitter. I think one reason why SMBs see this as it should be free is that Twitter tends to look cheap with all the tweets. Similiar to a flier in a laundromat. The other thing is Twitter wants to be much more than just a place tailored to businesses. I think this is what gets in the way of going down the path you suggest. At this point, I think Twitter is really only interesting in getting more and more people on Twitter. At some point, they will have a critical mass of people where they could start charging a minimal subscription that would allow them to rake in money. After a few years of this, they could then go charging businesses for ads too after they prove it is a more lucrative advertising arena.

  2. Avatar Exposed

    I don’t know if charging a subscription is the best idea for twitter. Most social networking/media sites are free to use so why would anyone want to pay for twitter. Plus if they do start charging there will just be a copy cat site that does the same things for free, which will hurt twitter’s business in the long run.

  3. Avatar lindsey

    I think that you’re probably right about copycat sites. I think more than anything though, B2B companies would work fine, it’s the customers that would probably disappear, the common person who doesn’t want to pay for online services.

  4. Avatar MrsA TreaTMent

    You do have a very valid point. If twitter charged, it would definitely “encourage” people to take a more active role in using it. HOWEVER, right now with the recession, that may have a lot more negatives than positives. Maybe (and this is just me talking) they wanted to let twitter grow and allow everyone to experience it. Let the media talk it up and drool all over it in order to get people to feel that it is a necessity. Once this “tipping point” is established, they can charge what they want and really make things work. Either way, I agree with you. I just think a plan does exist, but they have to be patient first…

  5. Avatar joshrenalds2009

    I think Twitter is really only interesting in gettin getting more and more people on Twitter. At some point, they will have a critical mass of people where they could start charging a minimal subscription that would allow them to rake in money.

  6. Avatar Ashley

    I agree with several points on your post as well. If Twitter began charging a nominal fee, say $24 a year I would pay. I use it for business and encourage other business owners to utilize the benefits of Twitter. But it is common knowledge that Twitter is a free service and overcoming that would be rather difficult, perhaps quite costly. Great topic though.

  7. Avatar Cath

    Maybe for business users a small fee would make sense (once Twitter reaches critical mass), but for regular users who like using twitter to keep in touch with their friends, and who like the ‘mundane reporting’ of strangers as you put it – any kind of charge would be commercial suicide.

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