Twitter’s Survival as a Subscription Service Depends on Apple and Google

Assuming Twitter Inc. can weather its chaotic start under Elon Musk, the platform is poised to become more of a subscription business-with far leaner operations and less moderation. But that sets the stage for yet another challenge: a possible standoff with Apple Inc. and Alphabet Inc.'s Google over fees and content.

The vast majority of users access Twitter on iPhones and Android devices. Apple and Google safeguard those products and run the payment systems on their respective app marketplaces. After a botched debut, Twitter plans to relaunch Twitter Blue-a subscription plan that offers verification to any paying customer-at $8 per month on Nov. 29.

That means Apple and Google both stand to benefit: The new Twitter Blue costs $3 more per month than the last version, will likely be heavily marketed and-ideally-offer features that many users will deem worthwhile. That includes Twitter's famous blue check and the ability to appear higher in search results. If the rollout goes well, it will drive more revenue to Twitter but also to the tech giants.

That's because both Apple and Google take a commission on subscriptions purchased on their platforms. For Apple, that's a 30% cut (reduced to 15% after year one per subscriber). For Google, that's a 15% slice from the beginning.

Twitter is trending toward 250 million daily active users. Let's assume that 1% of that user base-2.5 million people-subscribe on either iOS or Android. Excluding added subscription products within Twitter, which adds up to $72 million in year one revenue for Apple and $36 million for Google.

That figure is obviously immaterial financially to either Apple or Google but could be seen as a costly commission to Musk, who has acknowledged that he overpaid for the social network. The fees, therefore, could put Musk at odds with the app store operators.The billionaire has long criticized Apple's fees, calling them a "tax on the internet" and saying they are "10 times higher" than they should be. Even within the last few days, he tweeted that "app store fees are obviously too high due to the iOS/Android duopoly."

For now, though, Musk has enough to worry about at Twitter without tangling with Apple or Google. The last thing he needs is a battle with trillion-dollar companies.