Just before Twitter (TWTR) released its 1Q17 report that showed it added new monthly subscribers more quickly than Wall Street expected, there was news that the company was testing a premium version of TweetDeck.
During its 1Q17 earnings call, Twitter addressed the issue of TweetDeck and dropped a few hints about what the future might look like. The company’s CFO, Anthony Noto, said that TweetDeck had garnered a loyal audience base, adding that “it’s an audience of size.” He hinted that Twitter could pack more value into TweetDeck and then offer the feature on a paid subscription basis.
The report that emerged earlier stated that Twitter could charge professionals such as journalists and marketers a monthly fee for access to breaking news alerts and analytics on TweetDeck. The company would still keep a free version of TweetDeck, perhaps as a way to build a base of users that it could convert to paid subscribers.
Growing non-advertising revenues
Twitter reported non-advertising revenues of $74.5 million, up 17% year-over-year. However, these revenues comprised only a sliver of its total revenues of $548.0 million. If the subscription version of TweetDeck is successful, it could boost Twitter’s non-advertising income.
Reducing overreliance on advertising spending
Charging for TweetDeck access could be a step toward Twitter breaking its reliance on Internet advertising spending, as the digital advertising market has become fiercely competitive.
Social media companies like Twitter, Snap (SNAP), Facebook (FB), and Alphabet’s (GOOGL) YouTube are entering into revenue-sharing deals or paying upfront fees to acquire content that can keep their users engaged. The problem is that these survival measures are driving up their expenses or slashing their revenues.
Twitter’s pursuit of professionals who could subscribe to a paid version of TweetDeck could upset Microsoft’s (MSFT) LinkedIn, which has distinguished itself as a professional networking site.