Twitter to introduce subscription option as adverts revenue drops significantly

JACK Dorsey, Chief Executive Officer, CEO, of Twitter, a social media networking platform on Thursday said the company is considering a subscription model to explore more money-making options from its users, following a decline in its revenue.

The advertising business of Twitter had suffered a hit in revenue which is at the centre of its earnings according to a CNN report.

“People are taking note of our differences and also at the same time seeing a lot of the opportunity on Twitter as we advance our roadmap.

“You will likely see some tests this year” of various approaches”, Dorsey announced to investors during a call held to discuss the company’s second-quarter revenue report.

Twitter’s advertising revenue was pegged at $562 million for the second quarter of 2020, which was a 23 per cent drop from the same quarter of 2019.

A development the company attributes to the money spent in building its now completed advertising server after it had blamed the server for its Q3 2019 earnings drop. The server allows Twitter allows brands to target ads to its millions of users.

Shares of Twitter grew by 6 per cent in early trading on Thursday after posting its financial statement for the second quarter, as its monetisable daily active users grew by 186 million users.

“We do think there is a world where subscription is complementary, where commerce is complimentary, and we are helping people manage paywalls,” Dorsey said.

Earlier in July, a job post alluding to a subscription product created a frenzy among Twitter investors as the post announced that the company was building a subscription platform codenamed “Gryphon” which increased Twitter’s stock indicating investor appetite for the company to find new revenue streams.

Dorsey described as a “tough week” in which the company struggled to address a massive hack that compromised several verified accounts, including those of Barack Obama, Joe Biden, Elon Musk and Jeff Bezos.

Dorsey apologised on the conference call, saying “we fell behind” on the company’s security obligations.
“We feel terrible about the security incident. Security doesn’t have an endpoint. It’s a constant iteration. We will continue to go above and beyond here as we continue to secure our systems and as we continue to work with external firms and law enforcement,” he said.

Amos Abba is a journalist with the International Center for Investigative Reporting, ICIR, who believes that courageous investigative reporting is the key to social justice and accountability in the society.

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