Regardless of how you feel about Elon Musk and his various projects and stances, at least he’s consistent. Well, in a business management context, at least.
Back in June last year, in an interview The Kilowatts, Elon discussed his plans for Twitter, which was well before he actually took ownership of the platform.
In that interview, Musk outlined his plans for a paywall bypass system, which would enable Twitter users to pay for one-off articles in-app, as opposed to subscribing to various publications.
1 dogecoin per article?? pic.twitter.com/tZtYGV9V5C— roman numerals (@4lejandronovas) April 29, 2023
That’s now becoming a reality, with Musk announcing over the weekend that Twitter will soon enable publications to charge Twitter users for access per article in-stream.
Rolling out next month, this platform will allow media publishers to charge users on a per article basis with one click.— Elon Musk (@elonmusk) April 29, 2023
This enables users who would not sign up for a monthly subscription to pay a higher per article price for when they want to read an occasional article.…
Which sounds interesting, right? As Musk says, maybe that’ll provide another way for publications to make money from people who are never going to become subscribers, but might pay for an article here or there.
Sounds interesting in theory, right?
Except, this very model has already been tried, and abandoned, many times, by various publications and platforms as they seek new monetization opportunities.
The key problem? By offering smaller, one-off payments for single article access, that then de-values subscriptions, which are far more valuable for media entities. Sure, not everybody’s going to become a subscriber, but a portion of their audience will, and if those few no longer need to subscribe to access content, that then means that your per-article model needs to deliver a lot more, in order to replace that lost subscription revenue.
Every past experiment has found that this ends up leading to a net loss for publishers versus the subscription system, which is why, try as many have, this system doesn’t work, and will fail again on Twitter.
Though there was one company that offered a similar program, which actually did deliver benefits for publishers and readers alike – and it’s owned by Twitter.
Twitter acquired Scroll back in 2021, which provided a way for users to pay a monthly subscription fee that would then be re-shared with publishers whose content you engaged with, enabling users to read more articles online, without needing individual subscriptions to each provider.
Scroll was primarily focused on providing an ad-free reading experience, as opposed to bypassing paywalls, as such. But the model could essentially function in that way as well, and Twitter had various staff from Scroll on its team when Elon took over at the app.
But he fired them, along with thousands of other internal experts who knew how to make something like this work.
But, nevertheless, Elon’s confident that he knows best anyway, which is why he’s now pushing forward with another project that likely won’t work, in defiance of all conventional wisdom and experience.
Which, for good or bad, is the Elon Musk way.
Back in November, in his first weeks of settling into his new role as chief of Twitter, Musk outlined his key areas of focus for the platform, and the initiatives that he had in mind to reform the Twitter experience.
One of those first plans was his $8 verification program, which, at the time, many people said would not work. And it hasn’t. Despite all of Musk’s various efforts to push Twitter Blue take-up, fewer than 800k users – or 0.32% of Twitter’s overall user base – have signed up to Twitter Blue thus far, while its $1,000 per month Verification for Organizations program also doesn’t appear to be faring much better.
But Elon’s sticking with them. Despite the poor take-up, meaning that neither program is likely to reach his original goals, Elon’s pushing ahead, and working on new ways to maximize subscription revenue, however he can.
Essentially, Musk decided early on that this was the best way to go, and he’s going to keep pushing, till it’s either clearly a failure, or it’s not.
Throughout his career, this has actually been one of Elon’s strengths, having the self-belief and fortitude to go against conventional wisdom, and push through with initiatives that others would likely recommend against. He’s seen success with this approach in his other companies – when Tesla was told that batteries were simply too expensive to produce, which was the accepted wisdom based on past experiments, Musk tasked the Tesla team to break down the process into specific steps, then explore where cost efficiencies could be gained.
And he was right. Tesla was eventually able to produce cheaper batteries, a key stumbling block for EVs in the past, and it’s this approach, which Musk himself called ‘first principles’ thinking, that he takes into every project, breaking down each process to its core elements in an effort to find the most effective ways to maximize performance.
It makes sense, to some degree. But in social media apps, you’re not dealing with binary components, you’re dealing with real people, and behavioral shifts are much harder to influence than scientific optimizations.
That’s why this new project likely won’t work, the same as Twitter Blue, the same as Community Notes at scale – the same as every project that Elon has implemented thus far as ‘solutions’ to long-standing problems at the app.
At some scale, they’ll deliver, and on some fronts, they’ll look to be working. But on a broader basis, among hundreds of millions of users, in different regions, and all using the app in different ways, none of these initiatives is actually going to solve the challenges that Musk and Co. suggest.
Of course, there is an irony here, in that I’m writing an article about how this won’t work, while highlighting that Elon has been able to deliver in the past by countering naysayers like me. In that sense, I do also have to also accept that maybe I’m wrong, and maybe, Musk sees something that I don’t, and he can actually make these shifts happen. But as noted, dealing with people, and how they interact, is a very different proposition, which is not as easy to solve for as mechanical science.
But Elon’s going to push ahead. Because that’s what he does.
It seems to me that this has become a key flaw in his Twitter approach, with Elon deciding long ago on the best way forward for the app, which he’s now committed himself to, despite the situation changing over time, and the results showing that they’re simply not sticking. Musk’s self-assuredness has also meant that he’s sacked and/or alienated many experts with knowledge that would help, like the former leaders from Scroll who understand the complexities of online content monetization better than anyone.
Elon has basically dismissed all outside opinion, and is pushing forward with projects that have been tested and failed many times before.
Maybe, though, the outcome will be different this time. But then again, probably not.