Twitter Enables Users to Charge Followers for Premium Content

Twitter's 'Super Follows' tool enables users to charge followers for items such as bonus tweets and access to a community group, a media report says.
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Twitter  (TWTR) - Get Report shares rose on Thursday after the microblogging platform unveiled a product that enables users to charge followers for access to special content.

The announcement came at Twitter’s investor day conference. Before the conference, the San Francisco company had said in an SEC filing that it planned to double its annual revenue by 2023. 

Twitter recently traded at $75.37, up 4.8%. The stock has doubled over the past year, as users stuck at home during the pandemic have flocked to social networks. The Nasdaq Composite has appreciated 45% over the past 12 months.

As for the new feature, it’s called “Super Follows.” It will enable Twitter users to charge followers for items such as “bonus tweets, access to a community group, subscription to a newsletter, or a badge indicating your support,” The Verge reported.

“In a mockup screenshot, Twitter showed an example where a user charges $4.99 per month to receive a series of perks. Twitter sees it as a way to let creators and publishers get paid directly by their fans.”

Of course, it’s might also be a way for Twitter to earn revenue by taking a cut of the sales. Twitter depends on advertising for almost 90% of its revenue.

In a Securities and Exchange Commission filing published Thursday, ahead of its annual investor conference, Twitter said revenue could reach more than $7.5 billion by 2023 from $3.7 billion in 2020 as daily active users rise to 315 million. 

The group also repeated its aim of targeting an adjusted margin of between 40% and 50% based on earnings before interest, taxes, depreciation and amortization.

Earlier this month, Twitter said it had 192 million average monetizable daily active users, its term for the number of daily users who can view ads, compared with 152 million a year ago. It also forecast current-quarter revenue to come in as high as $1.04 billion.

Analyst Ali Mogharabi at Morningstar puts fair value at $44 for Twitter shares but still likes the company. “While we applaud the firm’s execution, we believe the stock is overvalued,” he wrote in a commentary Feb. 10.

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