How hypermorality nearly brought Twitter to ruin
The platform should simply accept that it is in the business of selling online audiences to advertisers
PremiumSome failures look a lot like triumphs to me. Twitter, for instance. The company claims nearly 240 million active users. Most don’t pay anything to be users, but the company drew revenue of about $5 billion in 2021, mostly through advertisements, which is two-and-a-half times what The New York Times Company earned in that period, and a 35% jump over its 2020 figure. And Twitter does not spend a cent on war correspondents and other kinds of journalists, or on writers, artists and editors, or any sort of content for that matter. At this point in the story, Twitter looks like a colossal success to me.
But Twitter, incredibly, loses money. Its new owner Elon Musk has said the company loses $4 million a day, chiefly on expensive American engineers. It is like a newspaper that does not spend a cent on journalists or news, and makes billions on advertising, but still manages to lose money because it uses very expensive paper.
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There is something absurd about this. Since taking over this month, Musk has sacked half of Twitter’s employees. Maybe what he needs to do, to completely eliminate losses, is outsource most of the engineering to India; he may get rid of losses. Instead, Musk has been hinting that the prospects are bleak for Twitter. He tweeted, “How do you make a small fortune in social media? Start out with a large one."
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Musk has been mulling over a bad idea to make money, a plan that involves asking users to pay for an overrated element on Twitter called a “blue tick", which is actually a white tick on a blue background. While such users are promised fewer ads, this plan is erroneously called “subscription", and even more erroneously compared with You Tube’s premium subscription, which lets users watch advertisement-free content. In contrast, Twitter expects to charge its popular creators of content to perform.
One of the most difficult things in the world is to get people to spend, even on what they like. At the same time, people splurge on what they may not enjoy but are compelled to buy. People think hard when they have to pay ₹799 for a book they know they would like, but they will spend more on third-rate food and sugary water in a multiplex. I have no quarrel with them, I am only arriving at the nature of economic behaviour that hurts journalism and dooms any attempt by social media to get users to pay. People will not pay to be on social media, and that is all there is to it. It is a product they need if it’s free, and a product that is useless if they have to pay for it. The very reason social media came to be was that it was free, and it forced journalism and entertainment, in the beginning, to become free.
Twitter does not need the absurdity of asking even its popular creators to pay. The problem with Twitter is that right from the start, it had grandstanding embedded in its DNA, which has made its advertising ineffective, and what is ineffective on social media is very expensive. As a consumer, Facebook’s ads have always been more relevant to me, even when I do not like them. And as an experimental advertiser of journalism, I find Facebook ads priced at a fraction of Twitter’s.
The reason is that Facebook knows more about me than Twitter does. When put this way, and this is how it is usually put, Facebook seems creepy, but I have never lived in its fear. As long as my data is anonymous, I am happy to be a public resource.
In 2008, when Facebook tried to buy Twitter, one of the three reasons a co-founder of Twitter gave for rejecting the offer was the suggestion that Facebook was morally inferior to Twitter. He was referring to Facebook’s ability and intention to target ads effectively. Twitter, on the other hand, has long postured to consider data sacred even as it milked it. There is a wide perception that advertising is immoral. Even media outlets that are dependent on it, like Twitter, and venerable newspapers that do not let advertising dictate policy, despise advertising. From the time Facebook cracked its revenue model, through targeted advertising, its defamation began. You may have at least once seen the meme: “If you are not the customer, you’re the product."
One of the arguments against advertising is that it requires social media to keep users hooked, and this is done by fuelling hate and discontent. Before I explain why this is a flawed argument, I must point out that we never used to hear such complaints when Barack Obama used social media effectively to win his first US presidency. Social media suddenly became ‘evil’ only when a type of people, whom I actually get along with, began to lose.
The argument that advertisers indirectly fuel hate on social media is ridiculous when we examine why mainstream journalism lost revenue to social media. Journalism is, by its very nature, negative, and advertisers have for long wondered if their happy materialistic ads look silly on bleak pages about corruption, rape, war and murder. Mainstream journalism survived this complaint because advertisers had few options. But when the world changed, they began to flee regular journalism for happier media. So, hate thrives on social media not because of advertisers, but in spite of them.
When Facebook tried to buy Twitter in 2008, it offered half a billion dollars. When Elon Musk bought Twitter this year, he paid $44 billion. He overpaid, but wiser people would agree that Twitter is still worth many billions. Under Musk, if it can cure itself of its need for grandstanding and accept that it is in the business of advertising, it would perform a social good by surviving the times.
Manu Joseph is a journalist, novelist, and the creator of the Netflix series, ‘Decoupled’ .
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Should your retirement nest be far from the teeming crowd?
5 min read . 27 Sep 2022 Premium Unlocked
