by Jon Askonas
Wednesday, 2
November 2022
Reaction
07:15

Elon Musk doesn’t understand what he’s bought

The plan to make verified 'blue checks' pay will not end well
by Jon Askonas
The Chief Twit. Credit: Getty

Elon Musk has promised that Twitter’s lords and peasants system (i.e. verification) will be coming to an end. The new CEO said that verified “bluecheck” users would now be subject to a monthly fee of $8. Discussion of the proposal exploded with (broadly) media-adjacent people saying that the changes would effectively destroy Twitter and (broadly) Silicon Valley technology people tantalised by the chance to “own the libs” and make money at the same time. For once, the media people have a point. Musk doesn’t seem to know what he bought, and how to transform it while retaining Twitter’s distinctive advantages.

Many of the technology entrepreneurs around Musk rightly believe that a blue check is quite valuable. That doesn’t mean people will pay for it. Why? Because it’s a status good. There are a class of truly valuable goods that cannot be (directly) bought. Attempting to buy them actually lowers one’s status: if it can simply be bought, it no longer conveys status. The blue check is such a good: it means that person is one of the Elect of Twitter.

Ironically, Twitter seems to have created a status good mostly by accident, a combination of how prominently the symbol appears on the text-heavy feed, the seemingly random conferral of grace (Twitter initially had plans to verify most users before just stopping), and Twitter’s media-heavy user base.

Some have speculated that the paid-for blue check could function as a Veblen good, an apparent waste of money that conveys the wealth and power of its owner. But status goods are usually the opposite — they depend on conferring something that cannot be bought.

Indeed, the value of status goods is destroyed the moment it becomes obvious they are simply bought. Even where the particular good conveys a more monetary form of status by celebrating the wealth and taste of its owner, luxury firms work to transform a transaction into something more and preserve status. The right to buy the most exclusive Ferraris, for instance, is conferred on the most devoted customers. Similarly, anyone with cash can walk into a Hermes store and walk out with a handbag, but the opportunity to buy a signature Birkin bag is a rare grace reserved for loyal clients.

If high status individuals demure on the blue check — and especially if low status graspers and climbers pony up — the network effect reverses and it becomes unattractive to be verified. Soon, Twitter wouldn’t be able to pay people to have it. Many a status good has been destroyed like this.

To put it a slightly different way, the blue checks aren’t the users. They’re the talent. You don’t make the gladiators buy tickets. The other, most successful social media sites have found ways to compensate their best content creators. Twitter notably has not, thus far.

Nothing about this analysis suggests that Musk can’t raise Twitter’s revenue. His bigger problem is that he does not seem to know what he bought. There is little hope of Twitter becoming a “common digital town square,” as he put it in a recent letter to the advertisers. Instead Twitter, like all social media, is a “discourse-themed video game”. Specifically, it is a multiplayer online battle arena, where competing networks of accounts (informally led by influencers and blue checks) do battle. Luckily for Musk, there has been an enormous amount of experimentation with this genre of online games over the past few decades, and there is a clear winner of a business model: freemium with micropayments.

If he hopes to transform Twitter and fulfil its potential, Musk would do well to lean in to what Twitter already is. On the other hand, if he hopes to drive the journalists and media figures off of the website so that it features less prominently in our society’s discourse, he should proceed with his plans to charge blue checks, and would probably be doing a public service. But it is a hell of a way to evaporate forty-four billion dollars.

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R Wright
R Wright
26 days ago

Yet more elite seething on this issue. They’ll pay for it because they are addicts craving attention and dopamine. Musk sees straight them all.

chris Barton
chris Barton
25 days ago

Don’t care for Twitter as its not a real place but the meltdown from the usual crowd because their opponents wont be censored as much is hilarious.

AC Harper
AC Harper
26 days ago

Aha! Musk Derangement Syndrome is born.

Brendan Ross
Brendan Ross
25 days ago

The article is confused.
Blue Checks are not objectively about engagement, they’re subjectively about Twitter, Inc.’s approval of the account holder. They’re discretionary. That’s the problem with them, and Musk sees that as clear as day. It’s frankly shocking that this article overlooks that key fact.
If checks were objective, for people with engagement over a certain amount automatically, then that would be one thing — but they are not that, and never have been. They’re, in fact, a core part of the dark heart of Twitter — the corporate thumb on the scale — that Musk seems interested in changing, and it can’t happen too soon.
And if the journos and “textual MOBA” combatants dislike the new rules and leave, it will only help society as a whole, so that’s a win for us all. I fail to see the downsides. Diluting his investment? Isn’t that his call to make? How does Askonas know that Musk isn’t prioritizing changing Twitter (or, if needed, neutralizing it) over strict ROI? Askonas doesn’t have any idea, really, nor does anyone else, because Musk owns it privately now and can act however he wishes — ROI or not.

Hugh Bryant
Hugh Bryant
26 days ago

Oh dear, an entire article based on a simple misapprehension: blue checks will still confer status because they will still be assigned by Twitter.

And of course they should pay. Twitter is advertising for brand ME. Advertising has to be paid for.

In fact everyone should pay, even if it’s only a penny a year. If every Twitter account was connected to a bank account the platform would be a much less toxic place.

Piccolo Venezia
Piccolo Venezia
25 days ago
Reply to  Hugh Bryant

I agree. If every Twitter account was linked to a real credit card, Twitter would be a much less toxic place. It would then be possible to sue Twitter, get real names and sue those names to make them accountable for what they say. That would cut down on the lies, on the cancel culture, etc. Once, a very long time ago, I was a content moderator on an early Internet bulletin board. What we discovered was that forcing users to use their real names eliminated the flame wars that otherwise broke out. If someone insisted on anonymity, we simply threw them out.

jim peden
jim peden
25 days ago

Yes, real identities are the key to real debate.I agree entirely that if people felt responsible for what they say then they’d be a lot more careful.There are some obvious problems for the John Smiths of this world so some kind of secondary identification would be necessary. I’m sure the whizz-kids in Technopolis could come up with some solution not involving a total loss of privacy.

Bo Davis
Bo Davis
25 days ago

The entire point is identity verification to get rid of anonymous Twitter bots and elevate the tone. Musk has stated that public figures will be given a separate identifier just as politicians and official government accounts hold.
This is about real verification and accountability. In this case, you pay the $8, upload a photo ID – just as every online bank requires – and you are verified… Accordingly the system and Twitter-verse now know you are a real, verified person and your Tweets and interactions are elevated. However – you now have to act with a bit of decorum – you are no longer anonymous.
This makes perfect sense if you understand how bots and fake accounts infect the system, or how blanket anonymity pollutes the system…
This policy should make it almost impossible for bad actors to create and maintain bot farms. This stops the whack-a-mole games currently being played in the election arena and many other places of public discourse. No check – your Tweets become second tier.
It is irrelevant if you are a public figure or not because it’s impossible to be Checked without ID and bank details – that are then verified thru non-public databases. You can’t be misrepresented. If someone did go to the trouble of creating fake current ID and providing fake but proper address and bank details – then they have the sophistication to beat any system, regardless of what you put into place…
This will knock out 90% of the bot issues instantly because the bots will be shadow-banned by default.
Last, in countries and jurisdictions that are poorer or unsafe, they have been clear there will be diverging policies… Nothing says in a dangerous jurisdiction you cannot maintain an anonymous handle – it just says there has to be a real, verified person or organisation behind the account.
Sounds like an intelligent solution and a win/win regardless…
This will not affect free speech??? Free accounts are still allowed…
I’d go so far as to say over some term – every account should be verified. If not for a monthly fee – a one off fee of a nominal amount that further pushes towards universal verification.

Last edited 25 days ago by davisbr
Johnny Ramone
Johnny Ramone
25 days ago
Reply to  Bo Davis

I agree .. but only if it is a one-time fee. This monthly thing should only apply to some kind of extra services .. which might be where he ends up on it. A Gold Check.

Arkadian X
Arkadian X
26 days ago

Honest question, what are “twitter’s distinctive advantages’?

Julian Farrows
Julian Farrows
25 days ago

A blue check on Twitter doesn’t confer status – it merely denotes who is the approved establishment voice.

Benjamin Holm
Benjamin Holm
25 days ago

I agree that the blue checks are ‘the talent’, but that doesn’t make them deserving of being such. Most of it is undeserved and it’s good that Musk will destroy that system of group think. Many of the journalists on there have less intelligence than your average mechanic, so they should be brought down a notch or two.

Lewis Lorton
Lewis Lorton
25 days ago

There is a grammatical error in para 6 where the adjective ‘demure’ is used where the verb ‘demur’ is meant.

Samuel Gee
Samuel Gee
25 days ago

They already pay for it. He’s just putting the price up.

Ethniciodo Rodenydo
Ethniciodo Rodenydo
25 days ago

It will end well if it ends in the demise of Twatter

Chauncey Gardiner
Chauncey Gardiner
25 days ago

Many of the technology entrepreneurs around Musk rightly believe that a blue check is quite valuable.”
But, what is the value of a “blue check”? Do the “many” understand it (correctly or not) as an indication of quality, or does it merely reveal conformity?

Richard Calhoun
Richard Calhoun
26 days ago

I think your confused Jon … to win a blue tick you have to be granted it by twitter who decide whether you meet their credentials …
But twitter are a ‘speakers corner’ … no one should have privilege at a speakers corner … you just rock up with your soap box and start spouting

Brett H
Brett H
26 days ago

I know this probably absurd, but Musk and De Santis as a political team? Does just the idea of it make our current politicians look absurd?

chris Barton
chris Barton
25 days ago
Reply to  Brett H

Just look at the current POTUS.

Douglas Proudfoot
Douglas Proudfoot
25 days ago

The author doesn’t seem to understand economic viability. Twitter lost money consistently. Harassing half their potential users gave Twitter a lot fewer eyeballs to sell to advertisers. Twitter purged literally 100,000’s of conservative users after Jan. 6.

Musk’s purchase is based on expanding the user base, in effect the audience for the advertisers. This expansion requires restoring/establishing political neutrality.

In the past, blue checks were primarily a mark of Twitter’s political favor. A neutral Twitter can afford to charge a nominal amount for blue checks, which now will indicate you’re a real serious person who has a source of funds.

Jerry Carroll
Jerry Carroll
25 days ago

Strikingly, the photo of the author serves to nicely authenticate the juvenility of the article. Another one in the Wall Street Journal I read today listed ten “celebrities” who threaten to leave Twitter. I had only heard of one, Stephen King.

Bill Mische
Bill Mische
22 days ago

I have no more idea how it’s going to pan out than anyone else but it’s amusing to watch. Partially because I don’t think a blue tick is as significant as people who have one would like to believe, partially it’s because I remember a few years ago when right wingers were loudly moving to Mastodon.

Antony Hirst
Antony Hirst
20 days ago

Nobody understands Twitter. It is a psychotic communications platform for sociopaths.

John Riordan
John Riordan
24 days ago

Very interesting. I follow the logic, but would add that the blue check is a status good only if the status in question describes how high up the liberal-orthodox ladder one is.

It may well be that diluting the status of such individuals could be done without wrecking the business model, but it is also likely that it might result in no replacement of them with a more balanced commentariat, which is supposedly what Musk wants.

That said, Musk does seem to know what he’s doing generally, so I am confident there’s more to this than we know presently. I certainly don’t believe he’s spent $44bn purely to make a point about left-wing authoritarian bias in the tech sector, any more than he started Tesla solely out of a desire to save the planet.

Last edited 24 days ago by John Riordan
Nicky Samengo-Turner
Nicky Samengo-Turner
25 days ago

Musk is a man who has quite incredibly convinced the world that his 1 dollar bill , Tesla , is worth more than Toyota’s 10 dollar bill….

J Bryant
J Bryant
25 days ago

And therein lies the art of marketing. So many thousand-dollar handbags are just cheap tat with a brand name.

Roger Inkpen
Roger Inkpen
25 days ago

Agree. But I’ve no idea why this comment attracted 3 downvotes at time of writing. For the hell of it, here’s another one 🙂