Twitter’s product release schedule has been fun to watch over the past few months with a multitude of new features and some acquisitions (disclosure: I own shares in Twitter). One thing becoming increasingly clear is that it has a thesis tied directly to content creators.
Much of that thesis has been focused on the individual creator, with the roll-out of Tips (kind of a yawn) and Spaces (copycat Clubhouse) But last week it announced that it was acquiring Scroll.
According to the announcement:
“Those who create and consume news know that reading – and more broadly, journalism – deserve a better future. Scroll will help us build that future, solving one of the most frustrating parts about reading content online. We want to reimagine what they’ve built to deliver a seamless reading experience to our hyper-engaged audiences and allow publishers to deliver cleaner content that can make them more money than today’s business models. To do this, we plan to include Scroll as part of an upcoming subscription offering we’re currently exploring. As a Twitter subscriber, picture getting access to premium features where you can easily read articles from your favorite news outlet or a writer’s newsletter from Revue, with a portion of your subscription going to the publishers and writers creating the content.”
Twitter’s saying the right things here and I think the addition of Scroll is very interesting for a couple of reasons. To sum up Scroll in a single sentence, it charges users a monthly fee to see an ad-free experience on participating sites withoutbypassing the paywall. It has always been one of those products that I find quite appealing because, at least for now, the math has always worked out that the revenue per pageview is greater with Scroll than with most ads.
Even if the idea is great, it’s not enough. According to Tony Haile, founder of Scroll:
“However, we’re not moving fast enough. Every journalist that loses their job, every newsroom sold to unworthy owners diminishes the great conversation of which we are a part. That is why, when Twitter approached us about accelerating our mission we began to get very, very excited.”
Scroll is a remarkably complicated business to scale because it requires two approaches to sales: b2b and DTC. Because it requires you to drop a little JavaScript (JS) on the site, Scroll needs to have a relationship with the publisher, which is in-depth business development. This is the b2b component. Fortunately, the team had a deep bench of publishers that were willing to work with them, so it got early exposure. But not enough. The vast majority of sites I visit still have ads.
The DTC component of this requires convincing hundreds of thousands or millions of users to agree to pay a monthly fee to get an ad-free experience. That’s an entirely different type of sales and marketing. It likely requires considerable investment in paid marketing. It’s very hard to reach scale, especially when there are free ad blockers that do a similar thing.
So, Tony’s right. They’re not moving fast enough because it’s hard to move fast when you’re trying to sell two things at the same time. That’s where Twitter comes into play.
Twitter has not hidden its plan to roll out a subscription product. Between acquiring Revue, which allows for subscription newsletters, and the upcoming community functionality, it’s clear that it wants a new revenue stream. It’s going to be exposing subscription offerings to millions of people—exactly the same thing that Scroll would have needed to figure out how to solve on its own. That gives you speed.
But it’s still an uphill battle. Twitter is going to need to get incredibly aggressive convincing publishers to set up Scroll and also get aggressive convincing a lot of people to sign up simultaneously. Publishers won’t care about potential revenue without the readers and readers need comprehensiveness.
One way around this is for Twitter to just offer guarantees to publishers in the beginning. Find the 1,000 largest sites and offer them a chunk of cash for putting the JS on the site. It really isn’t hard to do (I evaluated it while at CoinDesk). At that point, when users hit many of the sites they’d naturally click to from Twitter, they wouldn’t see any ads if they were also paying Scroll subscribers.
However, Twitter is going to have to make a major decision on one critical feature: the publisher paywall.
My guess is that the powers at Twitter will try and encourage the creation of a “super bundle,” which brings together hundreds of publishers under a single subscription. If a user signs up for this, anytime they click an article from any publisher, the user would bypass the publisher’s direct paywall. It’s similar—though not exactly—to what Apple News+ is supposed to be.
If Twitter wants to continue building a deeper relationship with publishers, it needs to battle the urge that I described above. My hope is that publishers are smart enough to recognize that they need to own the relationship with the reader and keep the subscription on their website. As I wrote last summer, when Twitter first started talking about subscriptions:
Unfortunately, this type of product opportunity aggressively cannibalizes our subscription businesses and is an even more aggressive form of chasing audience scale. Additionally, it looks at the problem in the wrong way.
Here’s what people think the problem is… First-time users are coming to your site and they’re immediately seeing a paywall, so they never have a chance to learn about the type of content you have to offer. By letting Twitter sell a single subscription, they can see as much of your content as they want, giving you a chance to monetize them in other ways.
If a user wants to read multiple articles in a month, they are the exact target for a subscription. By giving up that control to Twitter, we are 100% cannibalizing our subscription business. We may be earning money from more people, but we’d likely wind up earning less in aggregate.
Instead, what Twitter should do is come up with creative ways to help publishers grow while also helping first-time readers access content without immediately hitting the paywall. Perhaps as a way of enticing the publisher to add Scroll, Twitter can offer a one-click register with the publisher when a user clicks over from the app. Twitter already has the user’s email address, so it could just transfer the data when the user opts-in. I’m no dev, so this might be incredibly complicated to do; however, I think Twitter used to have an ad product that basically did this.
In this scenario, Twitter is acting as a partner rather than a parasite to publishers. In Twitter’s case, it gets a better experience for its users while hopefully encouraging more of them to pay for Scroll to bypass the ads. And in the publisher’s case, they are getting more registered users and, hopefully, increased revenue through Scroll.
It’s great to see that Twitter wants to lean into its relationship with publishers. And I am a big fan of what Scroll wants to achieve. However, it’ll be an uphill battle – and if it’s going to do it right – it needs to think outside of the typical “platform tries to destroy everything” approach that so many of Twitter’s competitors have taken.
- Reproduced with permission from A Media Operator, the twice-weekly subscription newsletter for people building digital media businesses.
