Biz Stone, the co-founder of Twitter, came up with some interesting business advise for some one other than his very own micro blogging website. Stone spoke about rival social network, Facebook, and said the technology giant should think about launching a premium subscription service and charge $10 per month for it. With this new business plan Facebook can get rid of advertisements on its site for those who want to go “premium” by paying this amount. Stone proposed this idea via his site on Friday, July 19th and not only explained how he had struck upon the business plan, but also explained it in detail. You can see the original post below:
“Everybody thinks because I’m one of “the Twitter guys” that I must be good at using all social media. The truth is, if I can’t figure an app out in a minute, I usually move on to something else. Too many settings and options frustrate and confuse me. I like making simple stuff because I enjoy simple stuff.
When Facebook first came out, I signed up as soon as I could. Then I made the mistake of heedlessly accepting every incoming request until my account was so busy I couldn’t keep up. On top of that, Facebook added thousands of settings, features, and choices. Whenever I tried to get back into it, I became overwhelmed.
However, now that some former Facebook employees work with me at my new startup, Jelly, I’m using Facebook. Camille actually leaned over my shoulder and helped me go through every setting to simplify my Facebook experience on iPhone. Now I’m keeping up with friends and family on Facebook like a billion other people.
People love Facebook. They really love it. My mother-in-law looks hypnotized when she decides to put in some Facebook time. In general, the ads on Facebook don’t seem particularly useful or engaging. However, ads on the service are universally tolerated because that’s what makes Facebook free and free is nice.
Anywhoo, now that I’m using it and thinking about it, I’ve got an idea for Facebook. They could offer Facebook Premium. For $10 a month, people who really love Facebook (and can afford it), could see no ads. Maybe some special features too. If 10% percent of Facebook signed up, that’s $1B a month in revenue. Not too shabby.
It’s a different type of company, but by way of validation, have a look at Pandora’s 1Q14 financial results. Of all Pandora’s revenue generators, the highest growth year-over-year by far (114% growth rate) is in subscriptions—people paying a monthly fee for an ad-free experience. So there you have it.”
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