Elon Musk’s plan to turn Twitter into a subscription service is causing an even bigger argument with Apple and Google. In addition, Apple is eyeing Arizona for the US production of its chips and has reduced the prices for businesses with Macs.
Apple has just revealed its plans for a mixed reality app and world. This includes a video service for Apple’s upcoming 3D headset release.
If Twitter Inc. can weather the chaotic start under Elon Musk, the platform is poised to becoming a more subscription-based business with far leaner operations and less moderation. However, if the push into subscriptions creates a possible standoff with Apple Inc. and Alphabet Inc.’s Google over fees, content will also have to change.
A significant majority use iPhones and Android devices to access Twitter on a regular basis. Given this, Apple and Google not only offer their own payment systems for the products, but also operate with specialized security settings that keep those platforms safe from hackers. Twitter plan to relaunch the subscription service in November at $8 per month in order to provide an additional level of security with an extra layer of verification.
The new Twitter Blue might be a hit in the long run, potentially driving more revenue to Twitter while also benefiting the tech giants.
When publishers use Apple and Google’s app stores, they lose out on a lot of revenue. That’s because both platforms take a commission when subscriptions are purchased on their platforms. Apple charges 30% (reduced to 15% after year one) while Google charges only 15%.
Let’s assume that 1% of Twitter’s 250 million users—2.5 million people—subscribe to their app on either iOS or Android. This would add up to total $72 million in revenue for Apple, and $36 million for Google in the first year alone.
That figure is obviously immaterial financially to either Apple or Google, but it could be seen as a costly commission for Elon Musk. The fees, therefore, could put Musk at odds with the app stores operators.
There’s been a lot of controversy surrounding Apple’s fees and one of the billionaire’s latest tweets indicated that “app store fees are obviously too high.”
For now, Musk has enough on his plate at Twitter without dealing with trillion-dollar companies like Apple and Google. He doesn’t need a battle with them as they’ll just distract him from his main focus — which is building viable transportation systems.
If he can set Twitter back on the right track, and actually get the platform to where it is useful again, I expect a war of words to flare up. It might even lead to his company offering the service via web subscriptions for people who don’t want to use their iPhones or Androids–the fee would be zero, but they would never really fit with Silicon Valley’s business model.
Twitter is just one of the many social media outlets that is not off-limits to in-app purchases. Apple has yet to make provisions for this scenario, and if Musk attempted to circumvent them with Twitter Blue, there could be a Fortnite-like battle between Apple and Musk.
Epic Games Inc. had been in the headlines this week after its phenomenally popular game, Fortnite, was banned on Apple and Google authorized devices due to a change in their rules. While it’s questionable as to whether Twitter is more important to society than the two other offerings, it was not afraid in the past of pulling apps that defy its rules.
In the past year alone, $100 million of Fortnite fees have been generated. That was enough to put the iOS game on Apple’s App Store for a short time.
The issue bigger than fees is content moderation. Twitter has fired people who worked on policing misinformation and hate speech, causing its executives overseeing that to either leave or be laid off.
Despite Musk’s desire to increase free speech on Twitter, the change has also brought about side effects. The last few weeks have seen an increase in racism, antisemitic rhetoric, and scams on the social media platform.
The decision to give verification badges to any paying user without a real approval process has led to a wave of impersonation. There have been fake LeBron James trade requests, an announcement from an imposter Eli Lilly that insulin is now free, and many people pretending to be Elon Musk himself.
Twitter is rolling out new changes that include requiring new users to wait 90 days before becoming a Twitter Blue user. This means trolls won’t be able to start harassing and impersonating people on Twitter immediately with the blue check mark.
With increasing pressure to improve the quality of content on their websites, including mainstream news outlets and social networks like Twitter, media corporations are facing an interesting dilemma. Recently, these corporations have started to remove apps like Parler from their app stores, because they were not doing a sufficient job at moderating content. However, more recently, after Parler developed a controlling solution for itself and followed a series of steps it was able to convince Apple and Google’s review staff that it had taken appropriate actions after its removal from the ecosystem.
There are two potential scenarios in which Twitter could be blocked from the app stores: if it tries to circumvent in-app purchases and if it doesn’t enforce its content with the satisfaction of Apple and Google. That means Musk could only succeed with his subscription service if he took an indirect route through Apple and Google.
Google, Apple and Tesla are all very important companies, but they understand that the best situation would be if Twitter is left alone. That’s because they’re all interested in seeing their profits increase while also avoiding a fight with Twitter over user traction. The risk of alienating hundreds of millions of users—who are glued to their devices because of the app—would be decidedly too high if Twitter lost its position.