Monetize The Twitter API


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Discusses how to leverage the Twitter ecosystem that is already generating revenue by monetizing the Twitter API through a premium Twitter Developer Program. Submission to the Silicon Alley Insider Create Twitter's Revenue Model Contest.

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Monetize The Twitter API

  1. 1. Monetize the Twitter API Sachin Rekhi
  2. 2. Is Twitter Making Money Today? NO
  3. 3. But The Twitter Ecosystem Is! Advertising in Tweets Desktop Clients - $14.95 - $25 Funded Startups iPhone Clients Tweetie - $2.99 Summizer - $2.99 Acquired Startups Twittelator Pro - $4.99 Tweetsville - $3.99
  4. 4. Monetize the Twitter API • Twitter should monetize the channel that is already generating revenue for the ecosystem • By launching the Twitter Developer Program, Twitter can extract revenue from its partners by providing them with frequently requested benefits • Creates a healthy ecosystem where Twitter encourages platform apps to monetize
  5. 5. Successfully Monetized APIs • Microsoft paid partners • Provides APIs for third get access to discounted party publishers to accept developer tools, free PayPal transactions and marketing of their payments products, and access to • Monetizes every premium support transaction by taking a • Microsoft charges for variable percentage every product that wants the Certified for Windows seal to gain customer trust
  6. 6. Successfully Monetized APIs • While anyone can develop an app for free, Apple requires all developers that wish to publish to the App Store to join their iPhone Developer Program • Developers pay between $99-$299 • With 15K apps and growing, its a several million dollar opportunity
  7. 7. Successfully Monetized APIs • Facebook Platform’s Application Verification Program provides developers with a badge to encourage user trust of the app, increased distribution allocations for all viral channels, and an advertising credit • At $375/app/yr and over 48K apps, that’s tens of millions in annual revenue
  8. 8. Twitter Developer Program Benefit Details Commercial Use Only applications that have registered for the developer program will be allowed to use the Twitter API for commercial use (ex: charging for your app, advertising in your app). Non-commercial use will always be free. Twitter App Directory As part of launching this program, Twitter will launch a full app directory that allows any app developer to add their Twitter mashup for easy app discovery by twitter users. Developer’s who are part of the developer program will be eligible to apply for the certified app program to get a badge to increase trust with users and will also receive premium placement in the app directory.
  9. 9. Twitter Developer Program Benefit Details Increased Rate Limits Developer program participants will have increased client rate limits (currently 100 requests/hr) and developer rate limits (currently 20,000 requests/hr) to improve user and developer experience. Technical Support Program participants will have priority access to developer technical support to support their application development. Access to Firehose API A premium developer program will be offered for those key partners that need access to the proverbial “firehose” that gives them access to all non-protected tweets.
  10. 10. Twitter Developer Program Plan Pricing Features Twitter Developer Program $199 -commercial use -app directory -increased rate limits -technical support Twitter Developer Program Pro $9,999 -commercial use -app directory -increased rate limits -technical support -access to firehose API
  11. 11. Size of Opportunity Monetize the Twitter API - Size of Opportunity Plan Type Plan Price Year 1 Year 5 Year 10 New Units Revenue New Units Revenue New Units Revenue Twitter Developer Program $ 199 200 $ 39,800 5,000 $ 995,000 20,000 $ 3,980,000 Twitter Developer Program Pro $ 9,999 20 $ 199,980 500 $ 4,999,500 1,000 $ 9,999,000 220 $ 5,500 $ 5,994,500 21,000 $ 13,979,000 Totals 239,780
  12. 12. FAQ Won’t charging developers discourage Twitter mashups? No. Even under this program, the Twitter API will always be available for free use. Developers can continue to sign up and tinker with the APIs to their hearts content. Only when they wish to use the Twitter APIs for commercial use or are looking to further promote their application will they be charged. And at that point, they are likely to be generating revenue from the Twitter platform and it is fair to share that with the platform.
  13. 13. FAQ Aren’t there larger Twitter revenue opportunities? There definitely are opportunities that will generate significantly more revenue than the developer program. However, these other potential opportunities have significant risk, as they require introducing new unproven commercial concepts to Twitter. Developers are already making money today in the Twitter ecosystem and asking developers for a share of that has reduced risk. In addition, this revenue opportunity is not detrimental to the user experience as many alternative revenue opportunities may be (ex: charging users for access to Twitter features or introducing advertising).
  14. 14. FAQ Shouldn’t a SLA be part of the developer program? I think introducing a service legal agreement for developers has historically been an important part of developer programs. Amazon Web Services, for example, provides such an SLA. I also think that Twitter should consider adding this to the developer program over time. However, it may still be too early to introduce an SLA for Twitter as it continues to improve the robustness of its infrastructure.
  15. 15. FAQ Aren’t you capping the upside of the opportunity by charging a fixed fee instead of a percentage of revenue for developers (as Apple charges for iPhone apps)? While I agree that the upside is artificially limited in this early version of the developer program, lack of control and simplicity are two reasons to at least initially launch with this approach. Unlike Apple where they have full control of the app store, Twitter does not have control over much of what goes on with its mashups. Therefore it would be difficult for them to charge on a developer revenue basis. In addition, a low fixed price point provides a simpler model for all developers to understand and adopt.
  16. 16. FAQ Third parties are already building Twitter app directories. Why should Twitter build one itself? As the success of the Facebook, iPhone, and Android platforms have taught us, platforms succeed when there is a comprehensive, easy-to-use app directory for application discovery and installation. While there are several third parties building this, no one app directory is comprehensive. By Twitter providing one, everyone will be encouraged to simply submit to the one official directory. In addition, Twitter can provide consumer trust by ensuring apps listed on the directory behave well, aren’t malicious, and then advertise these benefits to users.