Subscription business models might be the future, but Twitter Blue and Snapchat Plus are not.
For the last decade, tech companies have relied on harvesting user data and selling advertisements as a way to turn a profit while keeping their services free. It worked great, until we all started realizing the ethical ambiguity in harvesting droves of user data and all tech companies not named Apple realized how difficult this business plan becomes when you didn't own the point of distribution (aka the iPhone). So eventually someone in every boardroom went, "So what if we just start charging people to use our service?" And thus started the plague of every company slapping "Plus" to the end of anything that smelled like cash.
Some of these subscription services have become so wildly successful that they are virtually utilities in some people's minds. It seems if you don't have Amazon Prime nowadays you might as well be wearing a t-shirt that says "I Prefer Being Single Anyways." Some of my friends would probably rather give up their shower water heater before their Spotify subscription. Companies like Amazon and Spotify don't even have to convince consumers of the value of their service. Consumers aren't stupid. They can clearly see the value in paying $139/year to have almost anything that their imagination can dream of and China can create delivered to their doorstep in two days. They can clearly see the value in paying $9.99/month — less than the cost of a single CD — to have unfettered access to virtually every second of music ever released. To subscribe or not to subscribe becomes a no-brainer of a question.
And then there are services like Twitter Blue and Snapchat Plus that, not for lack of a better word, suck. Twitter Blue offers users features like ad-free articles, new app themes and icons, a reader view, the ability to undo a tweet, and a few other knick-knacks for $2.99/month. This list reads with the sex appeal of a Mitch McConnell swimsuit calendar. The newly announced Snapchat Plus is an even bigger offender, offering little more than custom app icons and themes, a Snapchat Plus badge on your profile, the ability to see who has rewatched your stories, and an unsettling feature called Ghost Trails that lets you see your friends' locations over the last 24 hours on a map. Basically, it's some advanced stalking tools with some new pretty app colors, all for the low low price of $3.99/month. I love both companies, but needless to say I'm not impressed by either offering.
My advice to Twitter and Snapchat right now would be this: before launching a subscription service, give it the Snickers Test, and ask yourselves, "If my target consumer had a choice between buying my subscription service or spending that money on Snickers bars, would they choose the Snickers bars?" A Snickers costs roughly $1. If I had the choice between either a month of Spotify Premium or ten Snickers, I would choose the Spotify Premium in a nanosecond. If I had the choice between either a month of Twitter Blue or three Snickers, I would probably take the Snickers. At least I’d get a sugar rush.
Now, it'd be foolish of me to think people will only be subscribing to these services based purely on the value they provide in new features. Some people love a brand so much that they will spend any money to feel closer to the brand, and Twitter and Snapchat probably both elicit that response from some users. And while both of these services are pretty weak on features right now, you're also buying into the future of what new exclusive features the companies will soon offer you (although if that's your reasoning, you should just buy the subscription when that future comes). But for these services to actually have a material impact on their company’s finances, they will have to move beyond the early adopters and have more of a mass market appeal, and I’m just not seeing potential for that in their current states.
As the market continues to get more cluttered with subscription services, the only survivors will be the ones that offer so much value that consumers feel stupid for not subscribing. Half-baked services like Twitter Blue and Snapchat Plus don't even pass the Snickers Test, let alone the free market test.
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