Breakout

Would You Pay $20 a Month for Your Twitter Account?

Breakout

Whether it's good or bad, unjust or fair, it seems as if pre-IPO Twitter is destined to forever be compared to Facebook (FB). While the social media giant founded by billionaire Mark Zuckerberg may have five times as many users and is at least ten times more valuable than Twitter is reputed to be when its shares list later this quarter, at least one market watcher says the gap between these social media cousins doesn't need to be that large.

"I think you could do two things. You could not only have the user pay a monthly or annual fee, but you could also have the big news services or big celebrities charge" a fee too, says Joe Fahmy, managing director at Zor Capital in the attached video.

Just how large of fee is up for debate but @JFahmy, as he's known on Twitter, is certain most users would gladly pay, pointing out that Twitter would be better off without those who didn't want to pay.

Related: Twitter IPO Guide: What to Know Before You Buy the Hype

"I think the users that will walk are the users that are not adding value," he says. "The people that would pay are the people that you'd want...So a bunch of teeny-boppers don't follow Justin Bieber or one of the Khardashians, that doesn't effect your business model."

Of course, when Netflix (NFLX) tried to increase its fees a year ago it resulted in a huge uproar, and eventually saw the streaming media service back down and rescind it. But Fahmy thinks the site that limits commentary to 140 characters is different.

"The people who don't use Twitter don't get it, but the people who use it, use it for information and news, and I hate to use the word addicted to it, but they really rely on it," he states.

Of course, all of these subscription fees would be on top of Twitter's existing plan of selling ads and sponsored tweets, Fahmy says, adding that even more money and corporate karma could be derived by making co-founder and chairman Jack Dorsey's budding online payment business Square the one and only payment method.

Related: Twitter Co-Founder's Next Project Could Be Even Bigger!

"If you charge, let's says $100 (a year), and you have x-number of millions of users, you could go from a $1 billion in sales to $6 billion in sales, which is where Facebook is at right now," Fahmy says. "I think this could be a home run."

More from Breakout:

U.S. Treasury Default’s Catastrophic Consequences Explained

Government Shutdown: Stocks That Win When Workers Get Idled

4 Keys to Landing a Good Job

Rates

View Comments (495)