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Twitter’s Super Follows And The Unstoppable Growth Of The Freemium Economy

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At a Twitter event for analysts, the company presented its plans — previously disclosed to the SEC — to double its revenue by the end of 2023, with the goal of reaching 315 million monetizable daily users.

The company, which is doing well in the wake of last year’s threat of a shareholder rebellion to replace CEO Jack Dorsey, has interesting plans for its products and is showing healthy growth, making periodic acquisitions and has managed to take its share price to record highs.

The idea presented on Friday, Super Follows, which I’ve discussed recently, suggests the development of features found on platforms such as Patreon and Substack, making it possible for followers of an account to pay to obtain a series of exclusive services, which would allow them to access group functions, newsletters, special content, offers and discounts, along with audio conversations à la Clubhouse, in addition to some kind of badge or identifier.

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The idea, still with no schedule, is to be able to support payment walls that will enable an account to consider different levels of offerings, from a series of contents that are shared with everyone, to access for those who contribute economically to the activity of their creators. In short, a model of basic services plus premium services we are becoming used to for services ranging from the daily press to many other types of content, and which depends on the ability of creators to promote the growth of a conversion rate.

Persuading a Twitter follower to pay for content requires two things: firstly, that they perceive enough value in the content to want to continue accessing it when they are behind a paywall, rather than simply trying to find similar content elsewhere. This is a variable that some newspapers such as The New York Times, The Washington Post or Financial Times, or audiovisual content services such as Netflix and others have been successfully exploiting for some time now, but that has proved problematic for other media whose content is not seen as unique.

The second aspect is what I tend to call militancy: attracting users who simply want to contribute to the creation of particular content. This implies nurturing a committed community, which not only perceives value, but somehow identifies with it, feels part of it, and understands that its contribution is part of a project that goes beyond content. This is by no means simple, but it is increasingly common.

All this suggests we are seeing the emergence of a freemium economy wherein some services or content are offered for free to create the broad base of a pyramid, which then tries to seduce users with an additional offer of exclusive or premium services or content, with more or less sophisticated barriers.

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For a long time, the main idea was to offer content for free, but accompanied by advertising. This model, which has suffered as a result of increasingly intrusive and annoying formats, ultimately led to freemium models such as Spotify’s, in which advertising was used as a means of punishment or torture to encourage people to pay for the service.

We’re now seeing more and more freemium models: if you want to read articles on Medium, for example, created by Evan Williams, you can read some articles, but after a certain number, you will have to subscribe, or you can only read those that the author provides a link to (the links I use to share my articles on social networks are of that type). If you want to use Evernote, created by Phil Libin, you will be able to use certain features, but others will require you to subscribe. Phil also created the wonderful mmhmm video conferencing software, which is offered free for education or other groups for a certain time, but after that, requires a subscription too. In both cases, Williams and Libin found that trying to fund such models through advertising was a waste of time, and that the only way to make the service viable was for users to pay to access content. The latest social network sensation, Clubhouse, seems to be going down the same road: free basic functions and a subscription to access others, coupled with incentives for creators who generate more subscriptions.

In other cases, the aim is to create a habit: we all know that many sites use cookies to limit the number of articles that can be read and that it is enough to periodically delete those cookies to be able to access more articles and bypass the limitation. The idea is that over time, regular users will take out a subscription, and that people will eventually realize that the only way creators can survive is through financial support.

In the end, it all comes down to conversion rates: if a lot of people want to consume your content but decide to stay in the free section, you will have to consider the balance between what you give away in that section and the value you can add in the next one you offer as premium, and try to incentivize that conversion. This is an economic model that has been tried and tested for some time now, but which we will start to see everywhere.

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TWITTER

Elon Musk Says He’ll Pay $11 Billion in Taxes in 2021 But Twitter Wants ‘Proof’

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Elon Musk took to Twitter to clarify once and for all that he will be paying a whopping $11 billion as taxes this year.

If the number of times Elon Musk could count when someone has asked him to pay the full taxes, he would be a very rich..wait, never mind. The Tesla boss is rich beyond any private individual has been in history, reports said.

Musk has increasingly been facing criticism from many politicians and many others who insist he has not been paying taxes as compared to the profits his companies have been making. On Sunday, the SpaceX CEO took to Twitter to share that he will be paying a whopping $11 billion as taxes.

For those wondering, I will pay over $11 billion in taxes this year— Elon Musk (@elonmusk) December 20, 2021

But some of the questions did not stop. One person tweeted how they needed to see Musk’s tax returns while yet another asked how much percentage was that of his total income.

A few were, however scathing of the government who thought they will add that amount to their pockets rather than using it for some proper development.

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Wow that’s enough to give each person in the world almost $2 million but instead the government will just stick it in their pockets— greg (@greg16676935420) December 20, 2021

Why not $200 billion? Asking for a Senator— litquidity (@litcapital) December 20, 2021

Earlier this week, Democratic US Senator Elizabeth Warren has tweeted to say that Musk should pay taxes and stop “freeloading off everyone else” after Time magazine named him its “person of the year”.

In response, Musk shot four tweets in which he said that the senator reminded him of a friend’s angry mom who yelled at everybody. He tweeted, ““And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year.” “Don’t spend it all at once … oh wait you did already.”

He added further, “You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason.”

Musk responded by saying that he “will pay more taxes than any American in history this year”. This Twitter exchange left netizens divided as even though many supported Warren and agreed that Musk should pay more taxes, others felt that he was already doing enough.

Musk’s Tesla is worth about $1 trillion. Over the last few weeks, he has sold nearly $14 billion worth of Tesla shares.

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The Tesla boss has been pushing for his colonize Mars agenda for years now, and has made it very clear in some occasions that he would rather spend the money on putting humanity on the red planet, than pay his taxes. “My plan,” the SpaceX founder tweeted about his fortune, “is to use the money to get humanity to Mars and preserve the light of consciousness.”

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Twitter Admits Policy ‘Errors’ After Far-Right Abuse Its New Rules of Posting Pictures

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Twitter’s new picture permission policy was aimed at combating online abuse, but US activists and researchers said Friday that far-right backers have employed it to protect themselves from scrutiny and to harass opponents.

Even the social network admitted the rollout of the rules, which say anyone can ask Twitter to take down images of themselves posted without their consent, was marred by malicious reports and its teams’ own errors.

It was just the kind of trouble anti-racism advocates worried was coming after the policy was announced this week.

Their concerns were quickly validated, with anti-extremism researcher Kristofer Goldsmith tweeting a screenshot of a far-right call-to-action circulating on Telegram: “Due to the new privacy policy at Twitter, things now unexpectedly work more in our favor.”

“Anyone with a Twitter account should be reporting doxxing posts from the following accounts,” the message said, with a list of dozens of Twitter handles.

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Gwen Snyder, an organizer and researcher in Philadelphia, said her account was blocked this week after a report to Twitter about a series of 2019 photos she said showed a local political candidate at a march organized by extreme-right group Proud Boys.

Rather than go through an appeal with Twitter she opted to delete the images and alert others to what was happening.

“Twitter moving to eliminate (my) work from their platform is incredibly dangerous and is going to enable and embolden fascists,” she told AFP.

In announcing the privacy policy on Tuesday, Twitter noted that “sharing personal media, such as images or videos, can potentially violate a person’s privacy, and may lead to emotional or physical harm.”

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But the rules don’t apply to “public figures or individuals when media and accompanying Tweets are shared in the public interest or add value to public discourse.”

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By Friday, Twitter noted the roll out had been rough: “We became aware of a significant amount of coordinated and malicious reports, and unfortunately, our enforcement teams made several errors.”

“We’ve corrected those errors and are undergoing an internal review to make certain that this policy is used as intended,” the firm added.

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Jack Dorsey Post Twitter Is Chasing His Crypto, Fintech Dream

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At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on Bitcoin.”

On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square and doing more philanthropic work, according to a source familiar with his plan.

Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with cryptocurrency-related projects.

Underlying Dorsey’s broader vision is the principle of “decentralisation,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.

The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing Bitcoin’s popularity globally. Bitcoin price in India stood at Rs. 44.52 lakh as of 12:50pm IST on December 1.

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Dorsey has been a longtime proponent of Bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of Bitcoin unrelated to any government.

The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralised social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.

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The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.

Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own Bitcoin assets on its balance sheet, having invested $220 million (roughly Rs. 1,650 crore) in the cryptocurrency.

In August, Square created a new business unit called TBD to focus on Bitcoin. The company is also planning to build a hardware wallet for Bitcoin, a Bitcoin mining system, as well as a decentralised Bitcoin exchange.

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Twitter allows users to tip their favourite content creators with Bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.

Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion (roughly Rs. 2,17,240 crore) acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.

But these ambitions will not pay off until years from now, analysts cautioned.

“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.

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© Thomson Reuters 2021

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Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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