Twitter – Is Charging for Commercial Accounts THE Right Model?

So everyone has seen the news Marketing (in an interview with Biz Stone, co-founder of Twitter) broke about Twitter possibly having decided upon a route to revenues.

This is what Stone reportedly said:

“We are noticing more companies using Twitter and individuals following them. We can identify ways to make this experience even more valuable and charge for commercial accounts.”

There has been a lot of talk recently on where Twitter’s revenues could/should come from, everything from the lacklustre advertising models done to death to premium accounts offering SMS notifications (please please bring SMS back for the UK).

Conversations I was having with Robert O’Brien, a friend of mine, back at the end of 2007 early 2008 revolved around our thinking that Twitter had really missed an opportunity in monetising their namespace (not a revolutionary idea as we are in the digital identity space).  After all it’s a well understood model and one with which most digital life-stylers are quite comfortable to a level.  Even if Twitter had offered up leases for names say for US$5 a year with the first 2-3 years free just think how many of the 5 million plus active users today with more than a few months of interaction would be more than happy to pay up to maintain their account.

So it really comes as no surprise that Twitter are now considering paid for accounts, in this case for commercial use.  But there are a couple of obvious speedbumps:

• The proverbial gate of free accounts has been left open so long that perhaps the monetising namespace horse has already bolted.  Will commercial entities even now be able to realise and evaluate value in maintaining a presence on Twitter?  When Marketing contacted Bob Pearson, VP of communities and conversations at Dell, with that exact question and got a telling response: “If it becomes complicated and costly, our instinct would be to move elsewhere.”  Sadly I suspect that Dell and a raft of other commercial entities will be quicker to jump ship than they were to board in the first place.
• Personal accounts will be exempt (at the moment) from this charge.  Obvious really but for businesses to be enticed into using Twitter as a marketplace it is vital that Twitter continues to grow it’s user numbers.   But when does a personal account become a commercial account?

Is Barack Obama a personal account or (now) a government account?  What about Stephen Fry – sure it’s a “personal” account but the business of Stephen Fry is, well selling Stephen Fry.  How about one man bands, the Whatleydude’s and Jonathan MacDonald’s of the world just when (and who decides) do these personal accounts become something more?

I’m not suggesting for a second that there needs to be a process for deciding, just that this is an area dotted with mines.

And of course there has as yet been no mention of cost.

An alternative approach

In October 2008 I had about an hours chat with Jon Bishop at a meeting of the Tuttle Club in London where we talked about where Twitter could derive income.  An idea forming in my head at the time (and it probably was based on those prior conversations with Robert) was around the usefulness of Twitter as a B2B & B2C platform, a messaging platform if you will for applications using the simple form of source based routing we all know and love on Twitter.  The ideas weren’t fully formed at the time (an old school mate Nick Halstead recently discussed the API route to revenue over on his blog) until just before Christmas when during one particularly busy afternoon I stopped receiving updates periodically.

For any serious Twitterer the bane of one’s tweeting existence is the current API limit.  I’m not a developer and will not claim to fully understand REST of any of the other goodness that has gone into the creation of the Twitter API, but I do get API’s what they do and why.   The volume of messages going across the Twitter API daily must be huge (anyone got stats?) and growing weekly.

Of course scaling this is easy is the system was designed to do so from the ground up, but I suspect that like most organically created systems the  Twitter API groans and strains like a 14 year old boy.  Remember 2008 – the year of the fail whale?

Twitter’s current limit of 20,000 calls per hour for whitelisted apps and 100 calls (?) for individual accounts places some control on this growth but seriously hampers active users.

For commercial operations this restriction needs to be either lifted or better still paid for by volume.

Rather than having say Dell pay for an account username, have them pay for messages.  A bit like how we all used to pay for SMS before all-you-can-eat packages were available.  In fact why not have an all-you-can-eat service level for the seriously verbose users?

As long as the cost is proportional to traffic and the business provided can easily access, buy, maintain and analyse their costs/benefits and that the money is driven back into helping to create the infrastructure needed then everyone wins.

To my thinking this user-pays approach if applied makes the system fairer, placing cost on those who i) place the most strain on the system and ii) derive the most direct/indirect monetary benefit from their Twitter presence.  Not at all dissimilar to web hosting, it’s easy enough to get a free account but if you generate a lot of traffic you’ll have to pay at some point.

Of course I may have assumed too much.  Maybe the smarts at Twitter have realised some of this and are already heading down the API  route – until they announce more I guess we must but speculate.  I welcome thoughts and feedback.

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