By Nsunjo Erica
Twitter CEO Jack Dorsey said Thursday that the company is looking into exploring additional ways to make money from its users, by considering adding a subscription model after its revenue dropping sharply.
Twitter is considering this paid option move after suffering a sharp decline in its core advertising business after continued pull-outs by advertisers due to the pandemic.
“You will likely see some tests this year” of various approaches, Dorsey told analysts on an investor call held to discuss the company’s second-quarter earnings results. Dorsey said he has “a really high bar for when we would ask consumers to pay for aspects of Twitter,” but confirmed that the company is seeking to diversify its sources of revenue in what are “very, very early phases of exploring.”
Earlier this month, Twitter posted a job opening focused on building a subscription platform codenamed “Gryphon,’ and different rumors flared about a paid Twitter option.
Twitter’s stock surged at the time, signaling investor appetite for the company to find new revenue streams. Shares of Twitter rose 4% in early trading Thursday following the earnings results.
Twitter CEO Jack Dorsey says they want to make sure any new line of revenue is complementary to their advertising business. “We do think there is a world where subscription is complementary, where commerce is complementary, were helping people manage paywalls, we think is complementary.” Jack Dorsey added.
Twitter has earlier on been focused on offering a free service and making money by allowing brands to target ads to its millions of users.
However, on Thursday, Twitter reported second-quarter ad revenues of $562 million, a 23% decrease compared to the same quarter a year ago as many advertisers continue to pull back due to the pandemic.
Therefore as a response to the increasing loss of advertisers and its sharp decrease in the amounts of revenue Twitter has been forced to look into considering subscription options where users are to pay for aspects of twitter.
About a week ago, Twitter scrambled to address a massive hack that compromised numerous verified accounts, including those of Barack Obama, Joe Biden, Elon Musk and Jeff Bezos and according to Twitter’s earnings report, it as a “tough week”
On the eve of its earnings results, Twitter announced that dozens of accounts including one elected official in The Netherlands may have had their direct messages accessed by hackers as part of the security incident.
Jack Dorsey, CEO Twitter, apologized on the conference call Thursday for last week’s massive security breach, saying “we fell behind” on the company’s security obligations.