Elon Musk and Twitter are facing a lot of challenges. This week, a new competitor emerged. Threads. Its release comes just days after Twitter announced it would limit how many posts users could see in a day. And it’s not the first time Meta has copied an app or feature from a social media competitor.
So what does this mean for Twitter, for Meta, and for users?
To start off, why is Meta launching Threads?
Meta is launching Threads because it’s a good opportunity to release a product like this. Twitter has had a number of issues since Elon Musk took ownership of that social network in October. And for Meta, it’s a way to give users more stuff to do. It’s a way to keep them around longer in the Meta social media empire. And eventually, it would be one more way for them to show advertisements to people.
I want to talk a little bit more about the impact that this will have on Twitter, but just to stick with Threads for a second. I mean, Meta is launching this through Instagram.
Why it’s chosen to do it that way instead of having a standalone app?
Yeah, a lot of these companies make it look easy. But really, when it comes to getting people to download and sign up for a new app, it’s a lot of work. And by springboarding Threads off of Instagram, Meta is reducing the amount of friction that it takes for someone to sign up and get in there and quickly just start using the app. Instagram users will be able to quickly log into Threads using their Instagram accounts. And once they do that, it’ll also be really easy for them to follow the same people that they already follow on Instagram.
So this isn’t the first time we’ve seen Meta copy what a social media competitor is doing, is it?
Yeah, Meta has a long and quite elaborate history of copying competitors in several occasions to much success. They did this in 2016 when Instagram launched Stories, which was a copy of Stories by Snapchat. And they did it again in 2020 when Instagram launched Reels, which was their version of short form video, aka TikTok. And you can’t even go further back than that. About a decade ago, when they launched Messenger, you could argue that that was a copy of WhatsApp for just in case if they hadn’t been able to secure WhatsApp in an acquisition. So this is something that they do and they do well in its work for them in the past.
What does this mean for Twitter?
What are the potential big impacts of having a player like Meta enter this space? For Twitter, this is the sharks circling. I spoke with a bunch of social media experts, including some folks who had previously worked at both Twitter and Meta. I also spoke with some social media analysts. And none of them think that this means Twitter will die overnight. Like, we’re not going to see everybody leave this bar to go to the other bar. That’s not going to happen. But what is going to happen is that over time, any time an issue comes up or anytime Elon says something that offends a subset of people, every Twitter user will now have a real alternative that they can go to instead. Well, what do you mean by real alternative? Because there have been other competitors, you know, blue sky, spill, these other apps that have come out and tried to compete with Twitter already. Yeah, there certainly have been others, Massadon, blue sky, truth, social, even though they exist. The problem that they have is this, they don’t have mass adoption.
They haven’t seen a network effect, right?
From the estimates that I’ve seen, the three apps that I mentioned are all less than 1 million active users. Twitter is at about 350 million monthly active users based on estimates that we’ve seen. We know that Instagram has more than 2 billion monthly active users. Now, I don’t know how broadly threads is being released. I don’t know if it’s going to be available for every single Instagram user in every market where Instagram is available. But if you get just a quarter of Instagram users to sign up for this thing, it’s already larger than Twitter. And at the end of the day, an app like this, it’s about broadcasting whatever you have to say to as many people as possible, right? It’s a one to many broadcast channel. And if the main point of you using this is to be as loud as you can be, you’re going to go to whichever of these apps has the most users. I think that will ultimately be the deciding factor.
What does that mean for advertisers who also want the biggest audience possible?
For advertisers, it remains to be seen when it comes to social media. Obviously, the users come first and then the advertisers just go to where those users are. I think another strength that meta has is that they have a really deep roster of advertising clients.
What does that mean for Twitter’s efforts to retain and to grow its advertising revenue?
The biggest concern would be if threads does manage to siphon off a large swath of Twitter users. They’re already struggling when it comes to advertising revenue, right? They peaked at 4.51 billion in advertising revenue in 2021. And according to an estimate by Insider Intelligence, they’re expected to generate 3 billion in advertising revenue for 2023. So they’re already on a downward trajectory. And so it’s just going to be a much more competitive market for Twitter moving forward.
Thanks for listening.