Pirates Perspective: How Twitter Is Redefining The Social Media Category

The End Of Legacy Verification & The Rise Of User-Paid Social Media

Twitter's decision to get rid of its legacy blue verification check marks is just the beginning of a new era in social media—one that's dominated by user-paid services.

Twitter introduced the blue check mark in 2009 as a way to verify the authenticity of prominent accounts. It was meant to give users more confidence in the identity of an account they were following and to prevent impersonation and misinformation on the platform. So, Twitter’s decision to remove the legacy blue verification check marks is likely part of a plan to re-evaluate its verification process and introduce new ways of managing accounts.

In other words, Twitter is ditching the legacy free business model and exploring new avenues for generating revenue. (Remember: business model innovation is one side of the Magic Triangle.)

A lot of people have an issue with this change, but it’s not necessarily a bad thing.

In fact, it’s probably part of Twitter’s plan to redefine the social media category.

Social media platforms like Twitter, Instagram, and Facebook have been offering free services for decades. But it’s time for them to start monetizing their offerings. Platforms like LinkedIn and Medium have already adopted the user-paid model, and they're providing better user experiences because of it.

So, what does this mean for users?

And what does it mean for the social media category?

Well, it means we need to start accepting that free social media services will soon become a thing of the past. If we want quality social media experiences, we're going to have to pay for them. And that might not be a bad thing.

In fact, it might be great because it means we'll be getting better services in return.

In this short video, a series we’re calling “Pirates Perspective,” we talk about why Twitter's decision to get rid of the legacy verification checks hints at a major shift in the social media category. (You can see the full video transcript below.)

Remember: Everything is the way it is because someone changed the way it was.

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

Nicolas Cole

Katrina Kirsch

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Video Transcript

Christopher Lochhead: Twitter begins removing legacy blue checkmarks. So it appears Dr. Yoon, that what's going on at Twitter is on 4/20 ha ha ha. (Some people say that Elon has the humor of a child, and it's something I relate to.) So on 4/20, he decides that the old blue checks are going away. And the only blue checks that are going to be there are people who pay. And this has caused a tremendous amount of upset.

What say you, Eddie Yoon?

Eddie Yoon: Well, it seems like there's a near-term consideration and a longer-term consideration. If I start with a longer timeline, I think we've always said that the fundamental flaw with social media is if you're not paying for it, then you are the product. Period, end of story. So when people get mad about Facebook's data privacy issues and selling my data to who knows why and all that kind of stuff, that is a function of Facebook being free. And when you don't pay for something, there's no free lunch. So they're gonna monetize it through advertising.  

In the long scheme of things, this is what Elon is doing. I think what he said is the vision for Twitter is to maximize the most amount of unregretted minutes spent on Twitter. 

And so if you want to do that, then users have to not be the product. And for that to happen, they have to pay.  So where I think it's the right direction to make sure that the incentives are aligned, so that you as their user, are not monetized through an advertising model. But you, as a consumer, are paying for something. Now, their incentives are to make you happy, to protect your privacy, to give you new Scooby Snacks.

So the net of the long-term direction is the right thing to do. In the medium term, they probably need to do a good, better, best pricing on this because eight bucks a month is not something that everyone can afford, nor does everyone want to pay for.  But if you said (I'll make up a number) for 80 cents a month, you're not going to sell my data to advertisers. That's kind of interesting. Yeah, it's a hedge. And then in the near term, you know, it's gonna be a big kerfuffle, because you're gonna get a lot of noise from a small number of people who are pissed that they got their legacy stuff taken away. You know, I saw that Elon is paying for the eight bucks a month specifically for Stephen King and Lebron James.

Christopher Lochhead: Stephen King, apparently was pretty mad about this. I mean the other benefit to me as a user, Eddie, is one of the things I've hated about Twitter. If you're not dealing with somebody who clearly looks like a person, you don't know who you're dealing with. And now, we know that we're dealing with a person that's been verified. So I like that.

And frankly, my desire to engage with you on Twitter, if you're not a verified user, has pretty much dropped to zero because I don't know whether you're a Russian bot, or you know, a 12-year-old moron or I have no idea who you are. But if you're clearly a person who's been verified, and I understand the verification process is not that extensive, but it's at least a hurdle to get over. The other thing, more important, than getting rid of Chrissy Teigen. Isn't it interesting what's going on? There's a corollary. And I guarantee you Elon is watching it. And the corollary is that OpenAI ChatGPT has more paying customers after four months of availability than Google has had after two decades. 

And our friend and mentor and coach, Joe Pine, says: You know you have a valued experience when people pay for it. And he talks about, this bookstore in Tokyo, where people charge to go into the bookstore because the experience of being there in and of itself is worth paying for. And so if I'm synthesizing my Joe Pine teachings, the ultimate harbinger of whether or not you're delivering a real valuable experience is, “Will people pay for it?”

Eddie Yoon: 100% agree. I think it's the experience, you just nailed it. That's the key part of it. Because I will find as a user who is paying eight bucks a month, it's just easier to not have to do threads because I would always screw that up. I just like being able to write what I want to write in long form that's super simple, so easier as a creator. 

And as you said, when humans incentivize creators, because it makes it easier for them to create makes it easier for them to interact with people who aren't bots, as you said, then the total value of the ecosystem goes up. And this is less about the blue check marks because I don't think that that will ultimately matter. 

So Twitter probably needs to find a different way of explaining the benefit. Because I think they have lost the thread, that it's not about the blue check coming in or out. That's not it. It is exactly what you said, user experience, improving fraud, improving the content on it, and creating the right incentives. And so this, to me is a Languaging opportunity and a Lightning Strike that they probably miss. Because they positioned it as something that they were taking away, versus positioning it as something that they were giving to people.

Christopher Lochhead: 100% agree. And you know, the other thing that's fascinating about this is it's part of a bigger trend, right. So those of us who've been around for a while, we remember the early days of mp3s. And we remember Napster. And starting at that point, for the better part of 20 years, people said either you can pay for content on the internet, using TV can tend to need an it. 

What started to happen over the last 10 years and particularly accelerate over the last five?

Well, Spotify and Pandora have proven that people will pay for music. They won't pay what they used to pay for vinyl records, but they will pay something. Right?  What is OpenAI proving today? Well, you know what? You wouldn't pay for search. But 20 bucks a month for answer is a pretty damn good deal. Right? So many of us are paying for OpenAI. And you look at the growth of newsletters and Substack, you look at the growth in subscription media companies in the tech world, like the information and Steph Curry and there are many, many others. And so what's my point? 

My point is, over the last decade or so there's been an increase in the acceleration of the number of digital services that people are clearly now willing to pay for.

Eddie Yoon: Totally, totally. And then when we're just getting started. So this to me is it was a Languaging Lightning Strike opportunity that was missed. Gotta explain the value in the near mid and long term. And then exactly what you said, now it is getting the good, better, best correct. 

All of this is about figuring out the right price in which some people will pay, and more people will pay and even more people will pay. Because what is very clear is that people quickly forget the old system was not working, when everything was free. And you were the product and you were being monetized and to you know, very detrimental effect. So you know, humans are kind of prisoners of the moment. You just got to remind them of where we're going and where we came from. And that puts the person in that context, and then everything should be good to go.

Christopher Lochhead: And so the reality is he is pioneering a new category, which is he's the first at scale, user-paid social network. That's the category he's designing. Of course, it's clear, he wants to add a lot of things to it, and he's going to move to commerce. People forget that he's the PayPal founder. And so money is where the money is. So it'll be very interesting to see what he does there. It's very interesting what's happening with spaces. I see a scenario where popular Twitter spaces are more popular than CNBC for business news.

Eddie Yoon: It's gonna get worse as cable network goes like this, and digital audiences go like that.

Christopher Lochhead: Well, Mr. Beast has over 100 million subscribers, and CNN's daily Nielsen primetime numbers are half a million. If Mr. Beast had 5x CNN's numbers, he would think he'd just fallen off a cliff. Right? And so listen, if longer-term so a paid social network new thing, be adding a commerce piece see adding the Spaces piece where essentially you can create a digital media network like that on top of Twitter's audience and I'm sure many other things he's planning.

And I know people are mad at him. They don't like what he did to NPR, and they don't like his silliness. You look at this sign here he took the W out of Twitter and made it look like it go away. So it's called Titter. You know, he's doing some very silly things. But that to the side, he's doing some very smart things. And this is the other thing. What do you expect a legendary giant exponential risk-taking category designer to look like? They're not gonna be wearing pleated khaki pants from the Gap and buttoned-down blue shirts and looking like a McKinsey consultant. They are going to be kind of nuts. 

And I'm not saying I agree with everything he's doing. I'm not even making excuses for him. All I'm saying is paid social network with an e-commerce capability with a whole new media category paradigm is emerging. It's too early to say, but this is starting to get very interesting.

Eddie Yoon: I just looked it up, Instagram made $660 million in a day by copying Twitter by launching their own paid verification program. So, you know, categories, beget categories, as we always say. And remember from part three of the marketing metrics mini-book of marketing that drives our market cap—there's nothing more that people love than a stunt or fight. And that's what Elon is doing. He's not gonna take it away. It's amazing stuff that drew a ton of attention. And he's picking fights with everybody and their mother. I don't know that I've ever seen anyone quantify the value of the earned media he has generated. 

But he is secretly one of the great marketers of our time.

Christopher Lochhead: Absolutely. He knows how to drive digital WOM like nobody else on the planet.