Twitter makes all of its money from ads. It’s trying to change that.
Twitter CEO Jack Dorsey testifying remotely at a congressional hearing in October 2020. | Greg Nash/AFP/Getty ImagesJack Dorsey has bought Scroll, an ad-blocking startup. It’s part of a larger subscription push. Twitter has been a free service for its users ever since it launched in 2006. Now it’s getting more serious about getting you to pay up, via an optional subscription service it’s building.
Here’s the most recent example of Twitter’s plans, which are evolving in plain sight: It has bought Scroll, a startup that sells a subscription ad-blocking service and distributes most of its revenue to publishers.
Twitter says Scroll, which worked with publishers including the Atlantic, BuzzFeed, and Vox Media, will continue to operate, though it will temporarily stop signing up new subscribers. What’s more interesting about this announcement is that Twitter says Scroll will “become a meaningful addition to our subscriptions work” and will be integrated into an “upcoming subscription offering we’re currently exploring.”
Twitter says it will bring on all 13 of Scroll’s employees, including CEO Tony Haile.
Twitter hasn’t spelled out what its subscription plans are — except to say that it has some and that it will continue to make most of its money from its free, ad-based service.
But you can see the contours of what Twitter is up to. It has already launched Revue, a Substack clone that lets users create and sell their own newsletters; it takes a 5 percent cut of any revenue those subscriptions generate. Twitter has also said it plans to take “a small amount” from any sales generated via Spaces, a Clubhouse clone that lets users set up their own audio “rooms” to host conversations. Right now the service is free, but Twitter has announced plans to let users sell access to particular rooms.
And now it’s adding Scroll, a service that launched in 2018 and gives users the ability to block ads when they visit sites from participating publishers. In exchange for stripping the ads off their sites, Scroll gives publishers the majority of the revenue it generates via $5 monthly subscriptions.
Haile has said his service isn’t supposed to replace internet advertising, but says publishers who work with his company can make more money that way than via ads. From the outside, though, it appears as though Scroll hasn’t had the traction Haile would have liked: While he initially launched with a network for about 300 sites, he hasn’t been able to convince some major publishers like the New York Times and the Wall Street Journal to join his network — even though they were investors in his company. And if Scroll had a substantial number of subscribers, he likely wouldn’t have sold the company to Twitter.
It will be interesting to see what happens to Scroll now. On the one hand, syncing up with Twitter’s base of 200 million active users could give it a chance to find much wider distribution. On the other hand, I wonder if publishers will be wary about tying up with a big tech platform, given past experiences with Facebook. The social network has changed its media strategy multiple times and left publishers scrambling to catch up — or worse.
Speaking of the other big tech platforms, Twitter’s subscription push could be a real differentiator between it and other social media companies that make most of their money from advertising. Google and Facebook, the two companies that dominate digital ads, haven’t done much at all with subscription services so far. Google’s YouTube offers an ad-free service with a smattering of extra features, but that’s about it.
Instead, big tech players have generally tried working with publishers by offering them distribution for their content, a share of ad revenue, and, more recently, grudgingly offering them license fees for access to their stuff. Twitter, on the other hand, hasn’t done much with media companies besides some start-and-stop efforts to get them to make video programming for the service. Let’s see what happens now.
May 4, 2021 - VOX
Twitter CEO Jack Dorsey testifying remotely at a congressional hearing in October 2020. | Greg Nash/AFP/Getty ImagesJack Dorsey has bought Scroll, an ad-blocking startup. It’s part of a larger subscription push. Twitter has been a free service for its users ever since it launched in 2006. Now it’s getting more serious about getting you to pay up, via an optional subscription service it’s building. Here’s the most recent example of Twitter’s plans, which are evolving in plain sight: It has bought..