Twitter Mulls Ad-Free Platform - Do TV Networks Benefit?

Could Twitter really make a transition to a world of subscriptions and leave advertising behind?

And if so, who benefits from those ad dollars left on the table?

Just a week ago, Netflix said it would do kind of the opposite -- segue in a small way into advertising-supported service, while still maintaining its powerful subscription platform. So there are new players interesting in chasing vulnerable ad dollars.

You have Elon Musk to thank for these possibilities -- his $44 billion proposed buyout of Twitter, the 217 million daily active-user social media platform.

Musk has mulled a world of a free-speech, subscription-paying platform, possibly with the absence of any advertising.

But all this will come at a cost. Mark Mahaney, media analyst of Evercore ISI, said on CNBC that a preliminary bit of research shows just 13% of Twitter users “maybe” interested in a subscription social media service.

Social media apps such as Twitter or Snap may have to make the change -- entirely due to changing digital media ad-related dynamics.



Both Twitter and Snap are feeling the pinch of lower advertising-revenue growth, largely because of tightening restrictions from Apple as publishers decrease the tracking of their users -- all the while allowing Apple device users to take greater control over their privacy.

Snap pulls in around $3 billion in advertising spending per year, and Twitter, around $5 billion.

Who might benefit more directly from these abandoned dollars? TV networks.

Twitter gets much of its advertising from big brand marketers -- just like TV networks do. This is different from Facebook, which is home for millions of small business advertisers.

TV does not have the direct business outcome connection that digital media companies have long had, but eliminating cookie-based digital advertising means TV has more equal -- although not perfect -- ground compared to transitioning digital companies.

What's left, then, for Twitter in terms of the connection with TV?

TV networks have used Twitter for their word-of-mouth promotion and marketing that needs TV programming content. So that channel would go away.

Conversely, for years, Twitter has not been one to use much TV marketing for its own brand. But that could change in a big way.

Analysts believe if the bold Elon Musk dramatically swings for the fences, he will need to tell this new story to retain and grow users.

And that, my friend, will take some TV marketing dollars.

You can bet your fast-charging, donut-spinning Tesla on that one.

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