Twitter Likely to Start Testing Ad-Free Subscriptions Later in 2020
Would you pay for a zero-ads version of Twitter? The social network will “likely” launch a test of a subscription version later this year, according to CEO Jack Dorsey.
Dorsey discussed the company’s “very, very early phases of exploring” a subscription offering for Twitter. He didn’t provide an indication of how much a Twitter subscription might cost. The question came up on Twitter’s second quarter earnings call Thursday, following reports this month that Twitter was seeking to hire engineers to work on a subscription product code-named “Gryphon.”
“First and foremost, we have a really high bar for when we would ask consumers to pay for aspects of Twitter,” Dorsey said. “We have focused majority of our attention on increasing revenue durability, meaning that we have multiple lines of revenue to pull from. But most importantly, we want to make sure that any new line of revenue is complementary to our advertising business.”
Twitter thinks a subscription business could be complementary to the company’s core advertising business, and currently has a small team exploring the options for subscriptions, according to Dorsey.
In releasing Q2 earnings, the company said it has completed a rebuild of its ad server, and from an engineering perspective is focused on its performance ads road map beginning with Mobile Application Promotion (MAP), a suite of products that lets advertisers promote mobile apps and installs.
Dorsey said that “given the increased speed we’re moving at in terms of our development velocity, we’re now at a place where we can explore other ideas and you will likely see some tests [on subscriptions] this year.”
He added, “As we build anything, we want to work with the people that we’re serving and make sure that we have a phenomenal experience before we share it.”
For Q2, Twitter’s average monetizable daily active users increased 34% year over year to 186 million, a record quarterly gain of 20 million. The company missed Wall Street expectations, as revenue declined 19%. The company didn’t provide Q3 guidance except to say it expects total costs and expenses to increase 10% or more year-over-year, as it plans to increase capex spending in infrastructure “to support audience growth and product innovation.”
Dorsey, in his prepared remarks, addressed for the massive July 15 hack on Twitter by cybercurrency scammers that resulted in the attackers commandeering and sending tweets from 40 accounts, including those of Joe Biden, Barack Obama, Elon Musk and Kanye West. “We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue,” he said.
