For those not in the know; Twitter announced a host of new features at their investor conference last week. Hidden in that barrage of announcements was something that I had been waiting for and predicting for quite some time: “The Superfollow.” They spent almost no time on it except for a couple of example slides. But make no mistake, this is a nuclear explosion to traditional social media. And I’ll explain why 10 years from now, all the value creation in this industry is about to shift in a massive way.
To start, we need to revisit what traditional social media is and how the market has valued it. When Facebook IPO’d in 2012, on the surface they billed themselves as a virtual place for friends and family to meet and converse. But underneath, what they were really selling was ads, granular ads; based on people’s personal data. Prior to this, most advertising was at random. You’d pay a provider and get your company on a billboard or a commercial, with no idea who saw it. But now, you could advertise to whomever you wanted, as specifically or broadly as you wanted. Wall street salivated at this opportunity.
It’s undoubtedly why pretty much all of the value creation in this sector has chased this very specific power that Facebook harnessed. Even when you had competitors, such as Twitter, pop up and take a crack at them; no one could challenge the data and network effect advantage that Facebook had gained. Twitter had the best shot being the next largest network, but their users were often too anonymous or poorly tracked to yield much of a return for advertisers. So eight years later where do we find ourselves? Well, Facebook is now worth over 700 billion dollars and Twitter has barely cracked 50. So clearly all the value has been allocated to Facebook’s massive data stores over all others.
However, it’s my belief that this lopsided value centralization is about to have a massive dispersion; and I believe that Twitter has just taken this new movement mainstream for the first time. To most millennials and gen z’rs, we all know where the puck is moving: content creation by individuals. Platforms like Tiktok, Youtube, Twitch, Patreon, Substack, and Snapchat are all capitalizing on the incredible value creation that individual content creators are having across the spectrum of media. This includes video game players, entertainers, artists, and experts of all kinds.
These platforms are allowing people from any background to raise themselves up by their bootstraps and monetize their knowledge and skills. Until now, the best way to monetize an internet business was to slap on advertisements and user data tracking. But that’s now being disrupted by a large swath of user-generated content that people want to pay for. And while this is still a nascent industry, there are already hundreds of content creators who are earning millions of dollars a year across these platforms.
Now, what does this mean for Twitter specifically? Twitter has always been an interesting player in the social space. They’ve marketed themselves as the internet’s town square. Anyone person can say something out into the ether, and any other random person can listen in if they want to. This has created a massively valuable platform for many celebrities, entertainers, CEOs/companies, and content creators. However, unlike Facebook; Twitter has never monetized that strong glaring power that it clearly connotes in the zeitgeist of society.
While Facebook took advantage and grew users to the stratosphere, Twitter languished because they forced the wrong business model onto its platform. This is a place where Presidents can tweet world-changing news, and CEOs like Elon Musk can move markets on a whim. And yet, Twitter couldn’t figure out for the life of them a way to make any money off of it. Well finally, after all these young-bloods have proven the model, Twitter is moving into monetizing its content creators. Make no mistake, this will massively change Twitter and alter how we all interact with it.
I’ve been an avid user of Twitter since 2013. I’m an active participant in many communities including my favorite, Fintwit (financial twitter). I’ve seen the amazing wealth of knowledge that this platform has made available to me and I’ve learned and gained so much from all the incredible content creators that are helping people day in and day out. One common joke that people often tweet when enjoying Twitter is the caption “I can’t believe this site is free” followed by the piece of content they love. It brings joy to my heart that years of hard work by creators in building out their followings will not be in vain. They are finally getting the chance to monetize their fanbases with the “Superfollow.”
It’s going to be a monthly subscription model placed on top of the platform that will allow followers of certain creators to have exclusive access to content by these creators. And more crucially, pays these creators for their great work. To top it all off, Twitter gets to take a slice of all of these subscriptions and profit from the engagement. This finally monetizes the true power and scope of reach that the platform commands. This isn’t a financial report, it’s just meant to help you realize how powerful a move this will be for spreading out wealth creation in our society. The more we let creator-based platforms win, the less Facebook and other data aggregators get off of their massive data collections. It’s a wonderfully capitalistic movement and I’m for it in every way.
My hope is that Facebook, the most powerful platform, will bring this innovation to its users. However, it’s highly unlikely. It is antithetical to their business model in the short run and I can’t see their investors ever going for it. Regardless, I believe that Twitter’s move towards a content creator platform unquestionably affirms the proof of concept for all these new platforms. And it’s very likely that over the next five years if Twitter executes well, it could likely become the largest and most powerful content creation and aggregation platform on the web. I wish Twitter the best, and can’t wait for the explosion of awesome innovation that will be coming from this.
This article was written by Jesse Jones and was originally published at dogwoodmediasolutions.com. If you’d like to see your writing published on the Dogwood Journal, click here, and submit your writing.