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Is a Paid Subscription Service in the Cards for Twitter Inc?

By Motley Fool Staff - Apr 4, 2017 at 7:35AM

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The social media platform is a treasure trove of timely information -- can it be monetized?

In this segment from Motley Fool Money, Chris Hill is joined by a panel of Motley Fool analysts as they consider recent news from Twitter (TWTR 0.73%). The company is looking for ways to expand its services, but can it pull off a subscription feature successfully, given the issues it has experienced with its primary, free service? 

A full transcript follows the video.

This video was recorded on March 24, 2017.

Chris Hill: Shares of Twitter up 2% on Friday on reports that Twitter is exploring a subscription-based premium service for professionals. Jason, can they make this work? And do they need to make it work?

Seth Jayson: [laughs] And am I allowed to laugh?

Jason Moser: [laughs] I think you're allowed to laugh. My first reaction to this is, I appreciate the fact that they're considering something like this, but I also can't help but wonder if they're even able to possibly execute on building a feature like this, when they just haven't been able to fully nail the free platform. Now, with that said, information is obviously very valuable stuff, and Twitter is a treasure trove of very timely information, and a lot of it. If they can figure out a way to come up with a robust way to organize that data for the customers they're serving, then they would probably be stupid not to try something. To be clear, this is something that, it sounds like they're looking at building a more robust version of TweetDeck, which is a desktop way to manage your Twitter account. I could certainly see how businesses and professionals and journalists and whatnot would be able to see value in something like that. It eliminates the ad experience altogether; it probably ideally would reduce or eliminate completely trolls and the negativity that Twitter can exude at times. Again, I feel like, probably, this is putting the cart before the horse; they really need to shore up a few things on the free platform before they can really convince any of us that this would have any real chance.

Matt Argersinger: I think there's a use case for this. I think if they can capture 2% to 3% of monthly active users, which doesn't sound like a huge hurdle to me, this could really turn their profit picture around. I agree with Jason. I think, as a journalist, media person, public relations person, there are a lot of potential tools in the marketing world that you could use if you had new features.

Moser: I will say, we took a visit to Marriott headquarters up in Maryland last year, 2016. And it was interesting to see -- they have a very big, glass-encased room dedicated solely to managing their social media presence. It was wall-to-wall screens with a few people in there managing Twitter, Facebook, Instagram, and everything that was going on. I could definitely see where businesses, professionals, journalism, whatnot, could find value in something like this. It, as always, the key lies in execution, and that's a total wild card. But it seems like the demand is at least out there. People indicate they would pay for something like that. It's not meant, I think, for users like us sitting here at the table. That doesn't really change our experience much. But if there's something where professionals could find some value in there, maybe it's worth taking a look at.

Chris Hill has no position in any stocks mentioned. Jason Moser owns shares of Twitter. Matthew Argersinger owns shares of Twitter. Seth Jayson has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook, Marriott International, and Twitter. The Motley Fool has a disclosure policy.

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