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Twitter Considers Subscription Models After Ad Revenue Drops

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  • Twitter CEO Jack Dorsey has announced that the company is considering plans to integrate a subscription model on the platform.
  • Reportedly, that would likely be in the form of an ad-free version of Twitter.
  • The news, which was speculated earlier this month after a job listing from the company appeared, comes amid a 23% decline in the platform’s ad sales compared to this time last year. 
  • It also comes one week after what is now arguably Twitter’s most alarming data breach ever. The company revealed Wednesday that hackers targeted 130 high profile accounts and even accessed the private messages of one elected official in the Netherlands.

Twitter Could Launch a Subscription Model This Year

Amid a sharp decline in advertisement sales, Twitter CEO Jack Dorsey has now said that the company is actively exploring adding a subscription-based model to the platform.

“You will likely see some tests this year” of different models, Dorsey said.

Dorsey revealed the plan on Thursday as Twitter reported its second-quarter earnings report. Notably, ad revenue accounted for $562 million, and while that might sound like jackpot-equivalent figures to the everyday person, it’s actually 23% dip in ad revenue for Twitter compared to the same quarter last year.

That’s also despite attracting a record 20 million daily active users to the platform during the same time period.

Part of the reason why Twitter is seeing slumping ad sales is due to many companies struggling to stay afloat—let alone to maintain ads—in the current COVID-19 pandemic. In fact, Twitter’s drop in ad sales are in line with the U.S. market as a whole, which saw a 25% decline in ad spending for Q2.

Another factor that could play into the drop off involves recent ad boycotts by some companies. Those boycotts have largely been driven by ongoing protests calling for racial justice and criticism that social media platforms are not doing enough to silence hate speech. 

Rumors that Twitter executives might be considering such a move already began to circulate earlier this month after the company posted a job opening seeking a senior software engineer that would join a “new team.”

According to the posting, that team would be focused on “building a subscription platform,” codenamed “Gryphon.” It’s unknown if that name will be used in the future.

Following this news, Twitter stocks surged—particularly because a subscription model would open up new revenue streams and raise the company’s value. After Dorsey’s official announcement, Twitter shares again rose on Thursday.

“First and foremost, we have a really high bar for when we would ask consumers to pay for aspects of Twitter,” Dorsey said in justification of the potential model. “We have focused majority of our attention on increasing revenue durability, meaning that we have multiple lines of revenue to pull from. But most importantly, we want to make sure that any new line of revenue is complementary to our advertising business.”

Essentially, don’t expect to start having to pay to post that tweet that you just know is going to explode with likes; reportedly, Twitter’s subscription model will likely be an ad-free version of the platform. 

“The prospect of a paid version of Twitter—free from trackers, annoying ads and irritating algorithms which meddle with the clean chronology of the timeline—has been a holy grail for certain Twitter addicts since (basically) forever,” Natasha Lomas wrote for Tech Crunch. “So plenty of its most fervent users will be watching keenly to see exactly what Dorsey cooks up.”

Some social media platforms, such as YouTube, have already launched subscription services; however, YouTube’s model is more closely aligned to that of streaming providers. Twitter’s most direct competitors—Facebook and Instagram—are completely free and devoid of subscription models. Like Twitter, both platforms rely on ads. 

The Extent of That Massive Twitter Hack

Twitter’s stunted earnings follow what Dorsey called a “tough week” for the platform. In fact, it was arguably one of Twitter’s worst weeks ever as a massive bitcoin hack compromised dozens of high profile accounts.

The victims of the hack include of a wide scope of public figures, ranging from reality star Kim Kardashian-West to former President Barack Obama and presumptive Democratic presidential nominee Joe Biden.

Twitter revealed the further extent of that hack Wednesday and just how deep its security breach is believed to have stretched. 

“We believe that for up to 36 of the 130 targeted accounts, the attackers accessed the DM inbox, including 1 elected official in the Netherlands,” Twitter said in a tweet. “To date, we have no indication that any other former or current elected official had their DMs accessed.”

“We feel terrible about the security incident,” Dorsey said Thursday. “Security doesn’t have an end point. It’s a constant iteration… We will continue to go above and beyond here as we continue to secure our systems and as we continue to work with external firms and law enforcement.”

See what others are saying: (CNN Business) (Variety) (Tech Crunch)

International

India Cuts Off Internet for 81 Million To Stop Exam Cheating

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Teachers leaving bags at an exam center in Jaipur, Rajasthan on Sunday. Via: Rohit Jain Paras

While internet shutdowns are relatively common during exams in the region, non-test takers who were burned by the outage questioned why alternative anti-cheating measures were not taken instead.


No Cheating

Nearly 81 million people in the Indian state of Rajasthan had their internet completely cut off for 12 hours on Sunday in a government effort to stop cheating during the Rajasthan Eligibility Exam for Teachers.

Shutdowns of this nature aren’t unheard of during such exams. Other states implemented similar policies during important exam periods, and the move isn’t isolated to India either. Asian municipalities have also implemented similar anti-cheating measures.

It’s unclear why the decision to block the internet for everyone in Rajasthan was considered the best solution, rather than other measures such as confiscating electronic devices when entering exam rooms. However, for the other 79 million residents in the state, the outage proved to be a major annoyance.

Business Deadlock

Residents were without internet from 6 a.m. to 6 p.m, and local outlets reported workers, many of whom are still doing their jobs from home amid the coronavirus pandemic, found themselves without any means to contact their employers and colleagues. Employers couldn’t get messages and communications to clients, and overall, people reported that financial transactions came to a standstill.

In a country where digital transactions — either through mobile devices or even cards — reign supreme, having large amounts of cash on hand was burdensome. The inconvenience is expected to have an economic impact, something that the Udaipur Trade body warned would happen when the measures were first announced earlier in the month.

The Software Freedom Law Centre was similarly concerned about the shutdown.

“Internet shutdowns have a harrowing impact on citizens and are often disproportionate in nature. Internet shutdowns are bound to cause economic loss, an impact on education, healthcare, and other welfare schemes,” it wrote in a message to authorities.

“An internet shutdown during a pandemic can be especially grave considering citizens depend on the internet to get information, work, and study.”

The Centre also warned that this internet shutoff was likely against the law, as cheating doesn’t constitute a “public emergency” or “public safety” measure.

See what others are saying: (Quartz) (Yahoo! Finance) (The Indian Express)

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International

Germany Election: SPD Takes Lead for First Time in Nearly Two Decades

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Despite the lead, the Social Democratic Party of Germany will need to form a coalition government in a process that could be usurped by the center-right Union parties.


End of an Era

The Social Democratic Party of Germany (SPD) won a plurality of the votes in Sunday’s federal election and gained 25.7% of the seats in the Bundestag, according to preliminary results.

Many considered these elections to be the most important in over a decade as Germany’s parties were vying to be the successor to Chancellor Angela Merkel, who has been in office since 2005. Merkel decided to retire from public office this year, leaving behind a long legacy that is generally viewed positively inside and outside of Germany, according to Pew Research and Infrastat Dimap.

SPD’s win marks the first time in nearly 16-years that the center-right Union party, a coalition made up of the Christian Democratic Union (CDU) and Christian Social Union of Bavaria (CSU), hasn’t been the dominant party in the legislature. Additionally, it’s a major uptick from the last election in 2017 when the party only won 20% of the vote.

Despite the win, the SPD will still need a coalition, and depending on negotiations with smaller parties go, it’s possible that the Union parties could hold onto the Chancellorship. The most likely scenario, according to German media, is the so-called Traffic Light Coalition; named after the colors traditionally associated with the constituent parties. Such a coalition would be made of SDP, FDP, and Green parties and represent a broad coalition of center-left and center-right parties.

Olaf Scholz, the SPD’s leader and possibly the next Chancellor, agreed with German media, saying in a victory speech that the likely allies will be “the Green party and the FDP. And hence we are going to try to forge away along those lines.” 

Moderate Politics Win

Both the FDP and Green parties are likely to play kingmaker in the fight to form a government. Both have worked with the SDP and Union parties in the past to form governments, and any combination of these four parties could form a majority government.

Sunday’s election has not only been called a victory for the SPD but a victory for moderate politics. Like much of Europe, Germany has struggled with a rise in extremist parties such as the AfD, a controversial far-right party. In 2017, the party shockingly won 11.5% of the vote, 7% more than in 2013. However, on Sunday, it only won around 10% of the vote, indicating that it is losing ground and popularity to Germany’s more moderate parties.

Until the various parties of Germany can form a majority government in a process that can take weeks or months, Merkel will continue to be Chancellor.

See what others are saying: (DW) (CNBC) (CNN)

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U.S.

Alabama Man Dies After Being Turned Away From 43 Hospitals Overwhelmed by COVID Patients, Family Says

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Alabama currently has the second-highest COVID hospitalization average and fourth-lowest vaccination rate in the country.


Full ICUs Allegedly Delay Care for Emergent Cardiac Patient 

The family of an Alabama man who died of heart issues is calling on people to get vaccinated after he was turned away by 43 hospitals in three states while having a cardiac emergency because all of their Intensive Care Units were at maximum capacity with COVID patients.

The man, 73-year-old Ray DeMonia, was taken to Cullman Regional hospital in Alabama on Aug. 23. The next morning — around 12 hours after he was admitted — his daughter said her mother got a call saying that hospital workers were unable to find him a specialized cardiac ICU bed in the area. 

He was eventually transferred to a hospital in Mississippi about 200 miles away and died on Sept. 1, just three days before his birthday.

In DeMonia’s obituary, his family pleaded with people to get the vaccine.

“In honor of Ray, please get vaccinated if you have not, in an effort to free up resources for non COVID related emergencies,” they wrote. “He would not want any other family to go through what his did.”

Rising Hospitalizations

Officials and healthcare providers in Alabama have said DeMonia’s case is not a one-off incident. 

Jennifer Malone, a spokesperson for Cullman Regional, told The Washington Post that situations like this have been an “ongoing problem” reported by doctors at the hospital and others throughout the state.

“When patients are transported to other facilities to receive care that they need, that’s becoming increasingly more difficult because all hospitals are experiencing an increased lack of bed space,” she said.

On Friday, Scott Harris, the head of the Alabama Department of Public Health, said that the state’s spike in ICU patients has stabilized some. Still, he added there are not enough ICU beds for the number of patients that need intensive care, many of whom are unvaccinated.

Even with the spikes “stabilizing,” Alabama still has the second-highest COVID hospitalizations in the U.S., according to The Post tracker

The calls from DeMonia’s family for people to get vaccinated also come as Alabama struggles with the country’s fourth-lowest vaccination rate. Despite those figures, top officials in the state are doing little to address the issue.

Last week, after President Joe Biden rolled out a sweeping vaccine mandate for 100 million people and promised he would use his power to circumvent Republican leaders “undermining” relief efforts, Alabama Gov. Kay Ivey (R) told the president to “bring it on.”

Ivey then doubled down on her refusal to mandate vaccines in her state, where people are being refused emergency hospital care because so many unvaccinated people are in ICU beds.

“You bet I’m standing in the way. And if he thinks he’s going to move me out of the way, he’s got another thing coming,” she said, referring to the mandates as “outrageous” and “overreaching” policies that will “no doubt be challenged in the courts.”

See what others are saying: (The Washington Post) (NBC News) (NPR)

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