What Do Strategy Experts Think of Elon Musk’s Twitter Blue Policy?

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MIT SMR Strategy Forum

The MIT SMR Strategy Forum offers monthly insights from academic experts on pressing strategy issues related to business, management, technology, and public policy.
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To put it lightly, it’s been an eventful month at Twitter. After acquiring the social media company for $44 billion and becoming the owner and CEO on Oct. 27, Elon Musk introduced major changes to the organization — including laying off more than half of its workforce — with the ultimate goal of transforming Twitter into an “everything app” akin to WeChat.

Bots and fake accounts were a sticking point for Musk throughout his negotiations and subsequent lawsuit with Twitter, and he made clear as early as April 2022 that if his bid to buy the company were to succeed, he would prioritize authentication for “all real humans” on the platform. He quickly followed up on this promise on Nov. 9 by offering users the opportunity to pay $8 a month to add a blue “verified account” check mark to their profiles as part of the Twitter Blue premium subscription program. (Musk had initially floated charging $20 a month for the service but brought the price down to $8 after an exchange with novelist Stephen King.)

Twitter paused the new verification system just two days later, after numerous parody accounts obtained blue check marks and posed as major companies, brands, and political figures. While Twitter is planning to relaunch the program with a tightened approach to protecting against abuse, whether a subscription verification service will help the platform to grow engagement (which is important to advertisers) and foster trust for users remains a question.

We asked panelists on the MIT Sloan Management Review Strategy Forum to respond to the following statement: Charging for user verification will lead to increased user engagement and trust on Twitter.

Disagree

Sixty percent of panelists either strongly disagree (36%) or disagree (24%) that charging for user verification will help Twitter boost engagement and trust.

As many people in this category point out, it’s not that Twitter should not be charging users for features but that charging to verify that a user is who they say they are seems at odds with the aims of trust and authenticity Musk claims to have. As Erik Brynjolfsson of Stanford writes, “If Twitter wants more high-quality, trustworthy content, it should encourage verification and authenticity, not tax it. Verify almost everyone, with simple automated tools.”

Many also point out that Twitter’s initial try at Blue verification this month already illustrates the holes in a plan to build trust through a paid verification model. Tom Lyon of the University of Michigan writes, “It was so easy to fake a ‘blue check’ verification that entities from George W. Bush to Eli Lilly were faked almost immediately.” Likewise, the Rotman School of Management’s Richard Florida notes, “Verification is best based on some sort of qualifications or expertise, or even follower count. If you can just pay for it, it really isn’t verification at all.”

Others who disagree reason that charging for verification runs counter to Twitter’s value and appeal for users. As Steve Tadelis of the University of California, Berkeley, writes, “Fewer people will end up being verified because those who don’t have a public ‘brand’ are unlikely to want to pay for verification, and of those who have a public brand, many will be unwilling to pay.”

Disagree


“There are many good opportunities for charging for enhanced services on Twitter. However, charging for verification is not one of them.”
Timothy Simcoe
Erik Brynjolfsson
Stanford University

In addition to seeing paid verification as a questionable tactic for building trust, Nicolai Foss of Copenhagen Business School pokes holes in this strategy from the perspective of engagement, writing, “While user verification could lead to more trust as fake accounts and trolls are more clearly identifiable, it is questionable whether it will lead to more engagement.” Foss argues that anonymity on Twitter may be, for some, a feature rather than a bug, pointing out that “one of the attractions of Twitter is that a critique can be launched anonymously (e.g., against government oppression).”

Jen Brown of the University of Utah speaks for many in this group, noting that “a blue badge in a straight fee-for-check-mark world isn’t going to signal anything beyond a user’s willingness to part with $8 each month.”

Strongly disagree


“Charging for user verification is a tactic that seems almost orthogonal to the evolution of user engagement and trust on Twitter.”
Timothy Simcoe
Lori Rosenkopf
University of Pennsylvania

Neither Agree nor Disagree

Just under a quarter of panelists (24%) are neutral on whether paid verification would have an impact on user engagement or trust (or at least the intended impact voiced by Musk and Twitter). Many in this category note that it comes down to how Musk and Twitter execute rolling out verification.

Andrea Fosfuri of Bocconi University writes, “Charging for account verification might help increase trust and engagement if the collected fees are instrumental to implementing a more careful verification process at a larger scale.”

Richard Holden of the University of New South Wales writes that the outcome may hinge on “whether Twitter decides to do the existing verification plus charge $8 a month or just charge for verification without the existing vetting process.” Holden says that “if the latter, then I think it will decrease trust and engagement. If the former, then it could fund a better user experience, which would drive increased traffic and perhaps increased engagement.”

Neither agree nor disagree


“The churn in plans and the uncertainty it induces is likely a much bigger disincentive to engagement than the specific verification plans.”
Timothy Simcoe
Preston McAfee
Economist

Agree

Just 16% of panelists strongly agree or agree that Twitter’s paid-verification plan can improve trust and engagement on the platform. Across the board, those who agree find fault with the iteration Twitter debuted in recent weeks.

Melissa Schilling of New York University agrees that verification would increase trust and engagement but notes that rather than taking the shape of a monthly subscription, verification “should be a one-time fee that offsets the cost of the service taking steps to verify that you are who you say you are on Twitter.” As Schilling puts it, “Paying a subscription feels too much like paying for status, when what we want is something that any reputable social platform ought to want: authenticity and protection from spoofing.”

Scott Stern of the MIT Sloan School of Management notes that giving paid options to users for features they want can “refocus Twitter on value creation for users (not just on ads) and so encourage the development of a meaningful and effective public square (what the paying users want!).” However, Stern says that the current issue for Twitter is its haphazard approach to implementing these features, which may ultimately cause more harm than good.

Strongly agree


“The biggest worry of advertisers is fake clicks. To the extent that registering users reduces fake posts and fake clicks, advertisers will buy more and pay more for advertisements on Twitter.”
Timothy Simcoe
Ivan Png
National University of Singapore

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MIT SMR Strategy Forum

The MIT SMR Strategy Forum offers monthly insights from academic experts on pressing strategy issues related to business, management, technology, and public policy.
More in this series

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