© Reuters. Twitter targets content creators to cut competition
Twitter, Inc. (NYSE :), the American microblogging and social networking company, is looking for ways to diversify its revenue stream. The company launched Super Follows for its American users on September 1st – a feature that allows qualified users to sell subscriptions in exchange for access to exclusive content. The Super Follows feature is currently available to US residents with 10,000 or more followers, but will soon be available worldwide on Apple iPhone devices (NASDAQ :).
Twitter has also added a Safe Mode to its website and mobile app that allows users to automatically block malicious accounts for offensive language or repeated unsolicited responses. The safety mode feature, which is still in beta, uses artificial intelligence to automatically block malicious accounts of a specific user for a specific period of time. At the end of this period, users will receive a summary of all auto-locked accounts so that they can decide whether to permanently lock these accounts or remove selected users from the auto-lock list.
Despite these encouraging developments, I remain neutral on Twitter as the company is still struggling to effectively monetize its user base. (See Twitter stock charts on TipRanks)
Twitter: Using the Creator Economy
While the creator economy has risen to the fore in marketing, social media giants are transforming into creator-friendly platforms. With the rising popularity of TikTok and Instagram Reel and the growing number of startups focused on content creators, the creator economy is likely to grow by double digits over the next decade.
According to data from CB Insights, the creator economy was valued at a staggering $ 143.8 billion in late 2020, but this industry is still very young as there are millions of content creators yet to monetize their content. Twitter has over 200 million daily active users, and with the introduction of its new subscription-based business model, the company intends to become one of the platforms of choice for YouTubers. Successful implementation of this plan could help Twitter diversify its revenue streams, which would be a positive outcome for long-term investors.
Users must have at least 10,000 followers, be at least 18 years old, be based in the US, and have tweeted at least 25 times in the last 30 days to qualify for Super Follows. Activists, journalists, musicians, content curators, writers, gamers, astrologers, skin care and beauty professionals, comedians, fantasy sports experts, and other YouTubers who meet these eligibility criteria can apply to monetize their follower base.
The new feature is designed to encourage engagement and allow users to make money while serving content to their most engaged followers.
In addition to Super Follows, the company has already introduced some monetization tools to keep YouTubers and their followers on the platform. Last May, Twitter launched Tip Jar, which allows users to send money directly to their favorite creators through integration with Cash App, Bandcamp, Patreon and Venmo.
On August 27, Twitter introduced Ticketed Spaces, or paid live audio rooms, that users can use to make money by hosting online events. Additionally, the company plans to add newsletters, anonymous subscriptions, exclusive areas, and Patreon-like subscription tiers in the future, which is testament to its increased focus on content creators to fuel the company's monetization efforts.
Wall Street's opinion
Based on ratings from 23 analysts offering 12 month price targets for Twitter, the average Twitter analyst price target is $ 71.95 per share, an 11.2% increase from current market price.
If Twitter can emerge as a platform for content creators looking for monetization tools, Wall Street analysts will likely revise their price targets upwards in the coming months.
Twitter is experimenting with several new features aimed at attracting content creators, which seems like a good strategy given the expected growth in the creator economy. However, competition in the industry is likely to intensify in the future and the company's success will depend on its ability to thwart competition.
Disclosure: At the time of publication, Dilantha Da Silva had no position in any of the securities mentioned in this article.
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