Elon Is Fumbling Toward a Hilarious Solution to Twitter's Money Problems: Porn
Porn is one of the few areas where Twitter is the social media market leader. Elon Musk is going to need to monetize that business.
In a sense, Elon Musk and I are now in the same line of business: Our livelihoods depend on finding ways to get people to pay us for content on the internet. When I was an employee, I thought some about the economics of my work, but the relationship between my income and my productivity was indirect, and there are jobs where I know my employer was losing money on me.
Now, I’m a proprietor, and if the money doesn’t roll in, I don’t get paid. So I feel the pressure Elon is under as he tries to make sure his $44 billion investment in Twitter pays off.1 And I don’t begrudge him his effort to find new revenue streams for Twitter, a company that spent years underperforming its peers, in an industry where even its better-performing peers are now struggling.
One of the many weird things about this situation is, because Musk’s primary Twitter-related objective until about three weeks ago was to wiggle out of his agreement to buy it, he walked into the company without a clear plan for fixing the business. We can see from the press coverage that he and his advisers are white-boarding their ideas as we speak. Musk is even negotiating pricing terms in public with Stephen King.
Some of the ideas under consideration don’t sound to me like they will work. For reasons I’ll outline below, I don’t think a lot of users will take him up on his offer of a blue “verified” checkmark for $8/month, at least as the offering is currently conceived — allegedly, a checkmark might not even entail identity authentication anymore, which is bizarre if true? But some of the ideas do sound promising. And there’s a correlation: The ideas that sound most likely to work tend to be ideas that would work by monetizing adult content.
The internet is for porn
Years ago, back when I was at New York magazine, I met with two of the founders of OnlyFans, who made their pitch to me about OnlyFans not just being for porn. A term they used over and over was that OnlyFans is a “bolt-on” — that content creators build their fanbases on other platforms, like Twitter and Instagram, and then tack on an OnlyFans presence as a way to monetize those fandoms. But of course, OnlyFans is almost entirely for porn, for two reasons. One is that people (well, mostly men) are really horny, and porn is one of the things they’re relatively willing to pay for on the internet. Another is that the “bolt-on” is needed for terms-of-service reasons: More mass outlets are unwilling to make all the features OnlyFans has available (whether for their own internal policy reasons or for compliance with App Store rules) so you need to add on a separate user platform, even though that’s a bit clunky for the consumer.
But Twitter poses fewer terms-of-service issues for pornography than platforms like Facebook and Instagram do. Porn isn’t just allowed on Twitter, it’s huge — about 13% of all the content on Twitter is adult content. And some of the revenue ideas Musk is considering seem optimized for adult content:
He’s considering allowing pay-per-view paywalled videos.
He’s considering a system where you can send direct messages to “celebrities” of your choice, for a fee.
But that brings me back to the $8 monthly fee for the blue checkmark. I think this is going to be a really hard sell to consumers. Silicon Valley bigwigs are obsessed with the idea that the checkmark conveys prestige — prestige conferred disproportionately on reporters whom they despise — but if you can buy one, it won’t be a mark of prestige anymore. Twitter’s more successful competitors, like Facebook and Instagram, have not generated large subscription revenue streams. Some of the benefits Musk is promoting — like more favorable placement in displays of replies — seem like the sorts of things most users of the site have never devoted any thought to, let alone demonstrated a willingness to pay for. And even if a lot of the existing power users with checkmarks take up the offer to pay $8 monthly to keep them, the revenues will be small. There are about 400,000 verified users on Twitter. If a quarter of them pay, their fees will generate less than $10 million in annual revenue — basically a rounding error.
But what if you needed to pay for that $8/month checkmark in order to have your identity and age verified if you wanted to post or view adult content?
Porn is one of the things people will pay for on the internet
One of the big frustrations for writers like me over the last decade-plus is that consumers have a strong presumption that content on the internet should be free. In large part that’s because so much content is free. And, it’s because they’re used to free riding. Lots of publications have given away free content that was cross-subsidized by now-dying print subscriber bases or by advertising. This is why I’m very skeptical there will be mass interest in paying $8/month to access Twitter with some added bells and whistles — users expect Twitter to be free, and indeed, under Musk’s plans as described in the press, they will still be able to access it much as they do now, for free.
Many of the strategies that other platforms have used to develop subscription revenue bases don’t apply to Twitter. People pay for Bumble because they think it will help them find a romantic partner. They pay for Grindr because they think it will get them laid (and yet, only about 7% of Grindr users actually pay for the premium version of the product.) People pay for LinkedIn because they think it will help them make money — Twitter helps me make money, but the number of users for whom that’s true is not very large, and we can’t pay enough to matter for Twitter’s bottom line at a rate of $96 per year.
Where the real offering is the content itself (rather than the idea that the content will help you achieve a goal like career advancement or sex), the strategies almost always involve putting some really desirable, unique content behind a paywall. That’s why people pay for The New York Times, and it’s why people pay to subscribe to Substacks. But what is Twitter’s most differentiated content, better than what’s on other platforms, that you could paywall with less risk that everyone will just migrate to another platform? Porn, which consumers already have a demonstrated willingness to pay for — gross OnlyFans revenues were nearly $5 billion last year and sharply rising — and which most of the competitor platforms already prohibit.2
Musk is surprisingly well positioned to build a porn empire
Of course, I’m not the first person to think of the idea that Twitter could monetize its position as a leading destination for porn. Twitter had been working on a porn monetization project, but they shelved it earlier this year due to risks associated with it. Back in August, Zoe Schiffer and Casey Newton wrote about the company’s internal deliberations for The Verge:
Twitter would have several strengths if it decided to compete with OnlyFans, the Red Team found. Adult creators have a generally favorable attitude toward the company, thanks to how easy Twitter makes it for them to distribute their content. The project was also “consistent with Twitter’s principles in free speech and freedom of expression,” they said. Finally, the company was planning to obtain a money transmitter license so it could legally handle payments…
But the team found several key risks as well. “We stand to lose significant revenue from our top advertisers,” the team wrote. It speculated that it could also alienate customers and attract significant scrutiny from Congress.
The biggest concerns, though, had to deal with the company’s systems for detecting [child sexual exploitation] and non-consensual nudity: “Today we cannot proactively identify violative content and have inconsistent adult content [policies] and enforcement,” the team wrote. “We have weak security capabilities to keep the products secure.”
A remarkable thing about this story is that, despite pausing its plans to monetize porn, Twitter remains a leading destination for free porn, even though the company has apparently determined that its internal controls around porn (including controls that are supposed to remove and report child pornography) are woefully insufficient. Now Elon Musk has, more or less incidentally, acquired this market-leading, troubled porn platform — so what is he going to do in that position?
We are in a strange political moment — parents around the country are freaking out about whether books in school libraries are too explicit at a time when children have access to endless pornography on their smartphones. If Musk moved to require identity verification to post or view adult content, he could frame this not (just) as a strategy to make money, but a strategy to put porn where it belongs — in a walled garden, where only willing adults can access it. He can market this move as free speech, improved compliance, and harm reduction, all at the same time.3
And only Twitter could possibly create that walled garden now. Some adult content creators and many adult content viewers would prefer not to have to identify themselves4, and a new platform with these rules (plus an entry fee) probably would not get a lot of uptake. But Twitter has the advantage of incumbency and the advantage of most of its competitors not wanting this business. Adult content creators wouldn’t be thrilled about their Twitter audience contracting, but there would be upsides too — 100% of viewers seeing their content on Twitter would have payment details on file and a demonstrated willingness to pay for access to internet porn, and the other monetization tools Musk has floated would help creators seek revenue from those users. Musk has also suggested, vaguely, that user subscription fees could be used to fund payments to creators.
Many porn consumers would surely be wary of associating identifying information with their accounts (and Twitter would need to come up with a functionality to let users tie alt accounts to their verifications so they would not be forced to be horny on main) but many consumers have also already demonstrated a willingness to share at least identifying credit-card information with sites like OnlyFans. And even if a well resourced Twitter competitor with looser access rules did step up — Tumblr did recently announce that it’s going to allow nudity again — that competitor would face outsize policy and reputation risk because one of its main advantages over Twitter would be that you wouldn’t have to prove you were 18 to get in.
As for risk to its reputation and loss of advertising revenue at Twitter itself, that ship is already sailing — ad revenue losses are probably more about structural factors and less about politicized reactions to Musk’s ownership than it looks like in real time, but either way, Musk seems to believe that Twitter’s future financial fortunes lie in finding revenue streams from users. Plus, since Musk has taken the company private, he doesn’t need to worry about short-term market reaction if he makes a risky pivot for the company to rely heavily on adult content-related revenue.
The biggest problem would be the operational failures described in the Verge story. While he has done huge layoffs overall, Musk would need an enormous financial and human capital investment to bring Twitter’s adult content compliance in line with its peers. But unless he intends to ban porn from Twitter, much of that is an investment he will need to make either way — the platform’s current handling of child pornography is unacceptable even if Twitter isn’t making money off it. At least a monetization strategy would bring in revenues to defray those large compliance costs.