- Hey, what's up?
MKBHD here.
So, I really like Twitter, okay?
This comes from a place of love.
But, when you really like something,
you wanna see it succeed.
So, I've been on Twitter for 13 plus years.
I've tweeted over 50,000 times, don't judge me.
But, I use several different Twitter apps,
I have third party apps on my phone.
I've already made a "Dear Twitter" video,
this was five years ago.
And actually,
some of the suggestions that I made in that video,
including the ability to edit tweets
now has actually made it to the product
which is kind of amazing.
But, I don't know if you guys have heard,
but Twitter, they're kinda going through a lot right now.
So, Elon Musk has actually bought Twitter
and taken over leadership very quickly,
and a lot of pretty drastic changes
are being made very quickly.
Reorganizing the whole company,
firing people, unfiring people.
Tons of new feature suggestions are on the table.
Honestly, it feels like anything is on the table.
So from the outside looking in,
it just looks like complete chaos.
Even if you're on Twitter, it's chaos.
But I just, I want it to work.
Like, I want Twitter to be good.
I don't know, I'm one of those sickos
that actually enjoys spending time on Twitter sometimes.
And maybe it's kind of hard to explain why,
but Twitter feels like
it's a pretty unique social media platform.
It's a unique experience
because it actually makes everyone feel reachable.
Like, it actually has a pretty small user base
as far as daily active users.
Facebook has literally 10 times the amount of active users.
Twitter literally has less daily active users
than Snapchat right now.
But, it does feel like it has an outsized impact
relative to that number of people.
Like, there are a ton of interesting people, personalities,
athletes, politicians, celebrities, musicians,
and artists all over Twitter.
And it feels like
if you could just reach out to any one of them,
they might see it and reply back.
It just happens all the time.
So anyway, I'm rooting for Twitter to do well.
But, with all the chaos going on right now, most people
do not have that level of confidence in them at all.
Now, a few days ago, I tweeted that YouTube is in fact
still the only true S-tier social media platform.
To which Elon immediately replied, "For now."
So, you know what?
I'm just gonna take you at face value here.
I'm gonna assume and believe that you actually want Twitter
to be an A-plus, amazing, great social media platform.
So, I'm just gonna tell you
what I think Twitter should do to actually achieve that.
And this is just coming
from my years of experience on social media.
Elon currently follows me on Twitter,
maybe he'll see this.
Maybe I can actually make this a useful video.
Now, to be clear, I don't think Twitter
becomes an S-tier social media platform
by just aping YouTube
or by becoming a direct YouTube competitor.
It should still be its own thing.
But, as imperfect as it is,
there's a lot of things that YouTube does really well,
and there's a reason I put it as S-tier.
And there's a reason, the same reason that a lot of people
who blow up on a different social media platform,
from Vine, to TikTok, to Instagram, to Twitter,
nine times outta 10, their next move
is to try to convert as much of that as possible
to a YouTube channel.
So, here's a little diagram I made.
This is what I'll call the virtuous cycle
of the YouTube creator ecosystem.
It's oversimplified,
but obviously many creators on YouTube use outside tools.
But, the basic premise
is there's a lot of creators on YouTube,
and those creators are making content,
contributing to the world's largest online video library.
YouTube builds monetization tools around those videos,
which in turn gets creators paid and happy,
which gets them making more content, et cetera, et cetera.
It just keeps flowing in a circle.
Now, I don't know exactly how much Elon knows
about YouTube monetization specifically
or the tools that they've built.
I'm again, just gonna go by face value here.
But, it's also a legitimately hard business question.
If you're trying to build something like that cycle,
where do you jump in?
Like, Twitter doesn't necessarily have
a YouTube style massive library of content,
but what it does have is a lot of really interesting
high-profile creative users.
So, dear Twitter, a suite of evolving creator tools
would make a massive difference to the entire website.
So, over the years, YouTube has added things
from all over the place.
There's the YouTube Partner Program,
so where advertisers pay for spots alongside YouTube videos.
And YouTube shares 55% of that ad revenue
with the uploader of the video.
They also recently announced to monetize Shorts,
even more revenue sharing in the Shorts feed
starting next year.
They also have Super Thanks,
which puts a donation button under a video
that makes your comment distinct and colorful.
And creators receive 70% of that donated money.
They also have Super Chats and Super Stickers
during live streams,
so viewers can pay to have their chats highlighted.
Creators also keep 70% of that money.
And there's Channel Memberships,
where you can offer exclusive content
to a smaller group of paid subscribers or members.
And the creators, again, get 70% of that money.
Now, Twitter actually has some of this stuff already.
I think basically Super Follows
are like the equivalent of Channel Memberships.
And Twitter actually beats the percentage by a mile.
Twitter will give 97% of the revenue of a paid follower
to that creator on Twitter, up to 50 grand,
and then it's 80% after that.
That's still really good.
But, they really could use more of these things.
Like, just how YouTube has copied a lot of these features
from other platforms, Twitter should also feel free
to adapt a lot of these things for its own platform.
I keep thinking back
to remembering Periscope and live streaming,
when that was happening a lot more often.
That was really solid,
and that should have been more easily monetized.
And while you can upload videos to Twitter,
ads and revenue sharing
aren't really a thing for the masses,
but they totally could be.
I think they should be.
Imagine you're just a random user who's making videos,
putting them on Twitter, and by chance,
one of them just pops off and just gets a ton of exposure,
or gets retweeted by a bunch of people.
And suddenly, that's a nice chunk of change in your pocket.
That would be pretty incredible.
And that also incentivizes
more uploads of high-quality videos to Twitter.
Also, I saw Elon respond to our boy, Quinn, on Twitter,
(laughing gently)
who mentioned that the YouTube Partner Program
pays creators 55%.
And Elon said they can beat that percentage,
and that sounds great.
I believe you,
you've already beat some other percentages from them.
But, if nobody really advertises on your platform,
then the percentage doesn't really matter, does it?
So,
that's where we should just get right into talking about it,
relying on advertisers versus subscriptions.
So, as you've probably noticed by now,
the internet runs on ads.
It just does.
Like, social media platforms,
revenue's generated by advertisers.
Major websites, and blogs, and things that you read,
they run on ads.
Like all these big websites and major content places,
they get their revenue from advertising.
And whatever you think about ads,
like obviously they're annoying sometimes,
but it's what makes the world turn in online media.
It's just true.
Now, these companies are also smart.
These social media companies especially are smart
because they're trying to introduce
more subscription services
so that they can reduce their reliance on ads.
If you have more subscription services
that people actually pay for,
that's recurring revenue that's guaranteed every month,
instead of having to rely on the finicky ad buyer market.
So, Snapchat made Snapchat Plus,
which is a $4-a-month subscription
for some extra custom stories, and post settings,
and notification features.
Meta launched Instagram Subscriptions,
where creators can charge up to $100 a month
for exclusive content, including Stories.
We even have an MKBHD Discord channel, which is mostly free,
but now also has Premium memberships with extra channels.
And the thing that all of these
successful subscription services have in common
is adding value, or at least adding perceived value,
for the person paying.
But here's the thing, ads still run the internet.
Like, as successful
as some of these subscription models have been,
ads are still where the revenue's at.
Here's an example.
YouTube has 2,600,000,000 monthly active users.
It's gigantic, right?
How many of them do you think pay for YouTube Premium?
Go ahead, guess.
2,600,000,000 total.
So, it's 12 bucks a month.
You get background play, you get no ads,
you get the ability to download stuff for offline.
How many people do you think?
About 20,000,000 people pay for YouTube Premium.
So that's good money, sure,
but that's about 10% of the $28,000,000,000
they made in that calendar year.
So yeah, YouTube still runs on ads.
Even Netflix,
the like grandfather of subscription models for content,
they also just recently added in ads tier.
Like, it feels like 10% is the magic number
of how much revenue you can make with subscriptions
if it's a great subscription service,
but you just make the rest of your money with ads.
But Twitter, you know, if they really, really want
to reduce their reliance on advertisers,
if they wanna completely avoid any potential adpocalypse,
if they want Twitter to be this free speech haven
that is every advertiser's worst nightmare,
if they really wanna turn the corner
on subscription service revenue,
then they have to make a really good subscription service.
They have to make it full of features
that people actually wanna pay for.
You know what I always think back to?
People pay $30 a month for LinkedIn Premium.
$30 a month, (laughing gently) that's a lot of money,
but that's because they offer real features
that people actually get value from.
So, fun fact, many years ago,
I tweeted just off the top of my head
a random subscription idea that I had for YouTube.
This was in like, 2016.
And the brilliant name I came up with was "YouTube Blue."
And I basically just wanted it to offer
faster priority processing
for extremely large uploaded files.
Like, I would totally pay every month as an uploader
for priority processing because that's of value to me,
someone who creates content for YouTube.
But now, many years later,
we have this thing called Twitter Blue.
Great.
Oh, it's a subscription service, what a coincidence.
Beautiful.
We should fill it with things
that people actually wanna pay for.
So my main request to Twitter
is putting actual time and effort
into thinking of and developing features for Twitter Blue
that are actually good and worth extra dollars.
And I think that focusing on the creator class
and the power users of Twitter can probably be
a really good guidance point for those things.
So unfortunately, the first year of Twitter Blue
kinda sucked because most of the features
weren't really compelling for very many people.
Like you could undo tweets, which was kinda stupid,
but you could also upload longer videos
that were up to 1080p.
Now, you can actually edit tweets for real,
which is really cool, and it's getting better.
But, think back to all of those creator tools
that we just mentioned earlier, and those types of things
would be worth way more than eight bucks a month
to many people, especially people just like me
who create a lot of content
and things that can just go on Twitter
because it unlocks monetization for all types of content.
And that would pay for itself very quickly.
I guess what I'm trying to say
is having a little verified human check mark
next to your name doesn't feel like something
that will be worth $8 to most people,
especially because the benefit
is to everyone else on the platform
and not the person paying.
So, it strikes me as something
that should probably just be free.
But, this has been really interesting to watch.
Right now, there are 400,000 verified users on Twitter.
So, judging from Elon's tweets
because that's kind of all we have to go by,
being verified will be one of the features
looped into Twitter Blue.
So, let's say 100% of them pay eight bucks a month
to keep their badge.
That would be $77,000,000 per year, which sounds like a lot.
But again, just to refresh your memory,
Twitter made about 5,000,000,000 of revenue last year,
and 92% of it was from advertising.
And so, this would just be a drop in the bucket.
But, it sounds like Elon's plan is to have everyone pay,
you know, every real human on Twitter connect a credit card,
pay eight bucks a month, that's their ID,
and then just keep using Twitter like normal.
Which kinda violates my rule number one of the internet,
which is you probably can't charge money
for something that was previously free.
I don't think most people are gonna wanna do that.
I really think that new value added to Twitter
that people would choose to pay for,
like better features, higher quality media,
I think that's the way.
There's a whole thread I'll link below of random ideas
someone just came up with and did mock-ups for,
and some of them are actually really interesting
and I could see Twitter power users
loving some of that stuff.
But like, the eight bucks a month
for a verified human profile
was guaranteed a negative reaction
just because it's new money for something that's not new.
So in summary, I think Twitter Blue right now
is a pretty weak attempt
at getting as many people as possible to pay for Twitter.
And I don't think
there is any amount of cool features you could add
to get most normal people to pay for Twitter.
What I do think they should focus on is a smaller,
higher conversion group of power users and creators,
and then you will need advertiser revenue
to get into that virtuous cycle.
So, I'll just leave you with this chart again.
This is what I think success can look like for Twitter.
Like Twitter is what it is because of the people on Twitter,
as with any other social media platform,
like that's just a fact.
So, I think that's where you jump into this cycle,
by making things, features, and tools,
that those people genuinely want.
And then, crafting the rest of the rules and features
around the behavior that you want works every time.
Like if posting this 10-minute video on Twitter
would cost me eight bucks a month,
where posting this video on YouTube
would actually make me money,
then it's kind of a no brainer.
I'm posting it on YouTube,
and then I'll put a link on Twitter
because that's what the rules and the features incentivize.
So yeah, that's just my two cents.
And hey, maybe Elon's serious about not really caring
about the economics of Twitter at all,
in which case that would actually be totally cool.
But, the $44,000,000,000 aren't gonna pay itself, so.
There you have it.
Thanks for watching.
I'm rooting for you, Twitter.
Catch you on the next one.
Peace.
(gentle rhythmic music fading)