Musk Needs Twitter To Be His TikTok
Editor’s note: This piece was written and published before Elon Musk changed the price of Twitter Blue to $8/month. I have updated the post with a little bit about my thoughts about his additions to Twitter Blue. It doesn't fundamentally change this piece, thankfully. I’ve gone into more detail below, but every single problem that charging $20 a month has transfers right over to charging $8 a month, because charging for verification is a terrible idea.
Did you hear? Elon Musk acquired Twitter and sat around all weekend planning who to lay off. He also, confusingly, plans to charge $20 a month for Twitter’s “Blue” subscription, which will now include verification, an incredible coup de grace that ruins two products while also potentially making it harder to tell who the real accounts are. As I’ve previously said, I believe Elon Musk is a good to great operator and an awful chief executive, lacking the ability to sit and think, “what are the long-term ramifications of tweeting or doing this?” along with the ability to generate ideas ranging from stupid to ruinous. He made these fast decisions with a brain trust of mewling venture capitalist toadies who are no doubt excited to tell everyone that they were “the men in the room,” while Elon made decisions that they had no power to influence in any way.
It is, depressingly, exactly what you thought might happen - Elon Musk in a boardroom making big, weird decisions while a bunch of guys say “sir that is so beautiful!” on hour 14 of hearing him rattle off ideas that betray a total lack of use of the website known as “Twitter.” Musk now likely realizes he has paid 44 billion dollars to take the two worst jobs in the world - CEO and owner of Twitter, and in classic Musk style, he is refusing to back down despite how easy it would be to do so. In fact, he could gain a great deal of positive press if he tweeted “we’re going to hold off on any future changes to verification at this time,” and I’d argue we’d get a lot of Trump-Esque “this is the day that Elon Musk became CEO” comments that will make you search for hemlock on Amazon.
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Verification itself is a horrible idea for monetization. $20 a month (or $15 a month if you’re already paying for Twitter Blue!) works out - assuming every verified account pays - to around $60 million yearly - and the truth is that it may generate even less than that. The hidden value proposition of verification is that it verifies you are who you are, but also that Twitter thinks you’re special - that you’re important enough to make sure you’re the person saying the things you’re saying. By making it cost $20 a month and potentially not doing any reasonable level of verification to go along with it (identity verification will be quite demanding at scale, which makes me believe Elon will choose not to do it), you’ve effectively removed any good reason to pay. Major media outlets are already saying they won’t pay for it, too. All in all, it’s a classic Musk project - a rushed attempt to make himself feel powerful that impressed absolutely nobody. He’s also doing some excellent work alienating advertisers. Bravo!
And even if you are verifying people, you are effectively saying that the only valuable sources of information are those that pay to be given a special badge. It’s such a colossally stupid idea that I wonder if it ever happens - Elon has given an arbitrary week-long deadline for his engineers to complete the integration (or they get fired), which means that there is no chance of this being a nuanced, thoughtfully-planned project.
On top of that, what possible features could Twitter offer, and at this price, why would anyone pay? Discord Nitro ($9.99 a month) offers specific features that users need. Twitch subscriptions get special features in the chat. While there are features that could be added to Twitter, why are they so expensive? Well, obviously the reason is that Twitter is now saddled with an incredible amount of debt, rather than anything approaching an actual use case.
Well, thanks to Elon Musk, we have an answer - Musk is reducing the price of Twitter Blue to $8 a month to include “priority in replies, mentions & search,” longer audio and video, “half as many ads” and “the ability to bypass paywalls for publishers willing to work with [Twitter].” Twitter Blue now has something approaching a value proposition, but still has a massive issue with verification, an issue that Musk did not address in any way.
What’s incredible about this move is that it doesn’t deal with any of the actual criticisms of charging $20 a month for Twitter Blue or verification. It’s now cheaper, meaning it will make him less money, while also doing more, which will cost him more money. In the event that Musk does not make sure verification involves actually verifying the person is real, he has now created a cheaper way to pretend to be someone else. His statement about the current verification system being one of “lords and peasants” is very funny, because it takes a system that was not supposed to be about status but sort of became one into one that quite literally elevates one’s status above others if you have 8 dollars.
More importantly, the beneficiary of being verified is not the user, it’s Twitter. They are the ones that need people verified. It is asking your user to do extra work that they shouldn’t have to do, so that people trust Twitter more. Except he’s going to charge people, so the people who pay are going to be on some level paying Elon Musk to do something for Elon Musk.
There is every chance this changes again before it gets implemented.
However, I find it interesting that Musk plans to revive 6-second video company Vine, a company that Twitter bought for $30 million and shut down a few years later. The reasons were fairly obvious - cool product, no monetization, no network effects, and let’s be honest, at the time Twitter was still trying to work out exactly what product it sold and to whom it would sell it. While “Twitter Live” absorbed the streaming tech that Twitter acquired from Periscope, Vine’s product never quite seemed to have much of an effect on the larger Twitter app, doomed to sit next to the Bowflex in the company’s basement.
Musk, however, sees something in Vine - an app that had a beloved audience that never quite seemed to catch on only to end up resembling TikTok, which now has a billion users and a vice-like grip on the eyeballs of younger demographics that both Twitter and Facebook have a great deal of trouble grabbing without, in Meta’s case, giving them depression. Yet TikTok is under a great deal of scrutiny due to its deep links to China, and its user growth appears to be plateauing, meaning that there is a window where Musk could have accidentally put Twitter into a position to compete with a social network that Zuckerberg has been trying to clone for several years.
Now, I realize that we’re talking about Elon Musk, a man who has made so many promises that an entire website exists to chronicle exactly how many times he’s broken them. But the weird confluence of events that we’re currently seeing suggests that there is a chance, no matter how small, that he could take Vine’s vague cult-like brand and turn it into something resembling a true TikTok competitor.
Sidenote: Twitter has already made overtures to try and copy TikTok with their extremely confusing (and buried) feature where if you scroll up from a video it will load a totally different video for some reason. This feature mirrors a great deal of Twitter’s previous product strategy - throwing ideas out there (like their ephemeral posting tool Fleets) half-heartedly and then killing them with the indifference one might pour away the flat end of a soda.
Twitter is not “cool,” but it is the place for a live reaction to something (other than TikTok). You do not rush to Facebook or Instagram to see the reaction to something in quite the same way you might to Twitter - the endless deluge of tweets is what we sickos log on for, the countless interpretations of events spooled out in a terrifying tapestry that resembles humanity. While a great deal of our love for Vine is nostalgia (and the code is so very, very old), Musk does have the ability to market products and has the attention of enough influencers that he could, if he can focus on one thing for longer than eighteen minutes, turn Twitter into the loathsome “everything app” he’s been touting.
The biggest barrier to him doing so is, ironically, himself. By laying off thousands of people from his company, Musk will have to pull other people from other projects to rebuild Vine. The question will also be whether Vine exists as a standalone experience or something baked into Twitter - which comes down to both a philosophical and technical decision as to how deeply he wants to invest in Vine itself or whether he’s intrigued by the idea of short-form video if he even cares enough to finish this project before starting another one. He is already having to pull staff from Tesla to fix Twitter, making them work extra hours for no extra pay.
Vine, to Musk, could be Twitter’s Instagram. It may be a flight of fancy, something he brings up to distract from the largely negative press. It could also (and very likely may be) a thing that he says is doable only to find out the engineering challenges are impractical at scale, leading him to promise that Vine is mere months away every few weeks until we all eventually forget about it. For him to pull off whatever it is he may be thinking, it will require more than labor abuse, or charging $20 arbitrarily, or taking feedback from venture capitalists - he will actually have to both enlist and listen to someone who understands social media. While TikTok may be an incredibly manipulative and chaotic platform, it’s very clear that ByteDance gets what makes a social network grow. Elon will have to learn to give up some degree of control to make this happen, which makes it all the more unlikely it will.
Regardless of the outcome, this is the new reality of Musk’s Twitter, which now already resembles every other company he owns. Elon is the CEO who cries wolf, ever-promising exciting developments so early and so often that it becomes harder and harder to get excited, even on the few occasions they actually arrive. The Twitter deal has become an anchor on his wallet and his soul, and its monetary (and social) success has direct implications on his future, with financing propped up using shares from his other companies. Remember, the acquisition of Twitter was more than its market capitalization, something that classically happens when you buy a company for a reason, ideally one that says “it’s worth more than I’m paying.” You are meant to see something that others do not, which is why they didn’t buy the company before you did.
And that’s what makes this particular transaction so utterly bewildering. Musk has spent more money than any one person should be able to own or spend on a company that he does not seem to have any rigorous plans for. Understanding what is happening in front of our eyes is so difficult, because this is not a company buying a company, but a guy buying a company. As human beings, conceiving one person doing this is confusing, because he is doing so in the same way that we might buy a house, leveraging our assets to prove we’re worthy of the purchase, except he bought a company. Now he - one guy - has become the owner, sole director, and CEO of a company that influences over two hundred million people in ways that its founders still do not totally understand. And to be clear, this is not one guy and his friends buying it - this is one guy, who has absolute power and complete control, who also does not appear to have thought too much about what he is buying and why.
The problem with predicting Musk is that he is not evil in a direct, linear sense, but often through his own manic, slapdash approach to the finer details. Musk may indeed need this to be a financially successful transaction, or he may truly want this as a vehicle to push his ideologies and those of his friends. But he may literally not have any plan at all past what somebody would think up on the way to a meeting, or perhaps before going to bed. Understanding Elon Musk is difficult because he approaches multi-billion dollar transactions like we might spend money on a new computer.
He needs to justify it - but how much? And to whom? And, in the end, does he really give that much of a shit?
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Keep it up Ed! You provide a level of insight into value of Twitter here that is sorely missing from the average nitwit wallstreet analyst. Your coverage of the clusterzuck that is Meta has been equally fantastic for similar reasons. Analysts so often get horrifically bogged down in the quant side of things they forget to step back and ponder the question of Wtf the company is even trying to accomplish, if it is technically possible, and if any actual human wants it at all let alone pay for it. Seeing someone intelligently layout and answer some of these questions is very refreshing.
I really enjoyed this article. Your style of writing is amazing - it’s entertaining while still being informative. Thanks for making this substack free - I’m a student and wouldn’t have been able to afford an actual subscription, so I’m really grateful to be able to read it! By the way, Musk is totally a “chaotic evil” on the moral alignment chart.