Twitter might be considering subscription options as ad revenues drop
Twitter CEO Jack Dorsey told analysts that there will likely be some tests this year involving a subscription model as he discussed the company’s second-quarter earnings results.
Twitter is looking at additional ways to make money at this point in time including a possible subscription model, CEO Jack Dorsey said on Thursday. Twitter is considering a plan along these lines as the platform suffered a sharp decline in its core advertising business.
Dorsey told analysts that there will likely be some tests this year as he discussed the company’s second-quarter earnings results. The Twitter CEO added that he has a high bar set for when the platform intends to ask customers to pay for certain “aspects” of Twitter, however, he did confirm that Twitter is looking to diversify its revenue sources and are in its very early phases of exploring that.
There were rumours doing the rounds earlier this month about a paid Twitter option when the platform posted a job opening that was focused on building a subscription platform codenamed Gryphon. Twitter saw its stocks surge at that point signalling “investor appetite” for new revenue streams. The platform’s shares rose by 4% in early trading on Thursday post the earnings results.
Twitter has been about free service all this time and Dorsey says that they want to make sure that any new line of revenue is complementary to their advertising business. The platform has so far made money by allowing brands to target ads to Twitter’s millions of users.
Currently, Twitter’s growth plans are under scrutiny as many advertisers have pulled back due to the pandemic. Twitter reported second-quarter ad revenues of $562 million, which is a 23% decrease as compared to their numbers from last year.
Twitter also had to deal with advertisers participating in an ad boycott following the protests in the US after George Floyd’s death. Executives, however, has not revealed how much of an impact this advertiser boycott has had on Twitter’s business.
Twitter’s earnings report came after a “tough week” the platform faced recently when a massive bitcoin hack compromised many verified accounts including those belonging to Barack Obama, Elon Musk, Bill Gates, Joe Biden, Jeff Bezos etc.