Twitter Inc. TWTR 3.97% plans to introduce a subscription service for content creators and said it would explore tipping, as it looks to double its annual revenue and accelerate user growth over the next few years.
The social-media company on Thursday said the subscription initiative, called Super Follows, will give people an opportunity to receive payments for their content. Twitter expects it to appeal to so-called influencers with large internet followings and plans to launch it this year.
Twitter executives didn’t say when it would roll out tipping or share details on how it will work. The company also didn’t disclose how much of a percentage it would take from sales for that feature or Super Follows.
Dantley Davis, Twitter’s head of design and research, said that “an audience-funded model where subscribers can directly fund the content that they value most is a durable incentive model that aligns interests of creators and consumers.”
Twitter disclosed the new business models at an online event for analysts, its first in several years, and said they are part of Twitter’s broader goal of reaching at least $7.5 billion in revenue or more by 2023, up from the $3.7 billion it made last year, according to a Securities and Exchange Commission filing. The company is projecting its daily user base to grow to at least 315 million by the end of 2023, or around 20% annually between now and then.
Shares in Twitter rose 5% in Thursday trading.
Moving into subscriptions could be a way for Twitter to rely less on advertising, which accounted for 86% of the company’s total revenue in 2020. Last month Twitter said it reached a deal to buy newsletter platform Revue Holding BV, tapping into a trend of tech companies providing content creators with tools to make money. The growing space includes other newsletter startups such as Substack Inc. and Rocket Science Group LLC’s Mailchimp.
With tipping, Twitter would join several other social-networking companies that offer users the opportunity to show support for one another or groups of users. Alphabet Inc.’s YouTube, Amazon.com Inc.’s live-streaming service Twitch and chat platform Discord Inc. allow users to purchase digital perks for this purpose.
Though it is working to build other lines of business, Twitter has added and improved tools for advertisers looking to market on the platform. The company has said one way it hopes to grow is by appealing to more small-business advertisers. The most of its advertisers are large companies.
Twitter has said Apple Inc.’s pending privacy changes could have a modest impact on its advertising business and that user growth might slow this year compared with the early months of the coronavirus pandemic, when many people started to spend more time online and on social media.
User growth is critical for Twitter because although its base has been growing for years, it lags behind competitors such as Facebook Inc. FB -3.41% and Snap Inc., SNAP -9.23% parent of ephemeral-messaging platform Snapchat. For the December-ended quarter, Twitter said it had 192 million daily users, while Facebook reported roughly 1.85 billion and Snap said it had 265 million.
This year Twitter has said it plans to expand its workforce by more than 20%, mainly in areas such as engineering, product, design and research. The company ended 2020 with more than 5,500 employees.
Write to Sarah E. Needleman at [email protected]
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