Twitter's API: Nothing Is For Free Anymore

Hi everyone, I’m Rick Barron, your host, and welcome to my podcast, That’s Life, I Swear

During the recent devastating earthquake in Turkey and Syria this past February, thousands of volunteer software developers were using a crucial Twitter tool to search the platform for calls for help, including from people trapped in collapsed buildings and connect people with rescue organizations. That Twitter tool is currently free. Elon Musk, is now planning to charge a monthly fee for Twitter's API tool to help generate revenue. What problems could arise from this decision? Would it even succeed? 

Let’s jump into this 

Elon Musk, the billionaire entrepreneur behind companies like Tesla, SpaceX, and The Boring Company, is known for his ambitious plans and unconventional business strategies.

Twitter office: Courtesy of BuzzFeed

Since taking over Twitter in October of 2022, Elon Musk has turned the company upside down. He’s laid off half the workforce and periodically throws a few more out the window, those who don’t buy into his thinking of how to run the company.

One employee has said “We haven’t seen much in the way of long term strategies.” The ongoing chaos makes it less likely that Musk will ever recoup the $44 billion he spent to buy Twitter. Not achieving that may eventually move the company into a slow death and thus decline into insolvency.

Twitter employees are working 24/7, trying to find ways to make to open a stream of revenue.

Achieving the revenue goal is even harder now that advertisers have walked away, which was a key contributor to Twitter revenue cookie jar.  Knocking on the door are the banks that Musk borrowed $13 billion to partially fund the deal.  The company will have to pay massive interest payments, which by the way is $1 billion in annual interest payments. 

The payments exceed Twitter's disclosed cash flow, which amounted to $1.1 billion as of June of 2022, according to financial disclosures Twitter made before Musk took it private on Oct. 27.

Elon Musk finding ways to make money. Courtesy of: ShutterStock

As yet, there’s been no sound ‘eureka, I found the solution to our financial problems.’ Elon Musk wants to nickel-and-dime Twitter users for features that were once free. One such freebie is Twitter’s API service.

Recently, Twitter announced its plans to charge for the use of its API (Application Programming Interface) service, which allows developers to access and use Twitter's data to build their own applications. This move has been seen by many as one way for Twitter to generate revenue and increase its profitability. 

The cost for this planned monthly charge is targeted at $100, a cost where for many volunteers and nonprofits on shoestring budgets, is just not possible.

While this move has the potential to generate significant revenue for Twitter, it also raises a number of questions and concerns about the potential drawbacks and consequences of this decision. Would such a decision fly with Twitter users?  

So, what is Twitter’s API? From a technical perspective, the Twitter API is a set of programmatic endpoints that can be used to understand or build the conversation on Twitter. This API allows you to find and retrieve, engage with, or create a variety of different resources including the following: Tweets. Users. Spaces.

In short using this API saves enormous time to analyze Twitter data because the sheer amount of information makes it impossible for a human to go through by hand.

The Potential Problems

Software developer: Courtesy of: Columbia Engineering

One of the biggest concerns about charging a monthly fee for Twitter's API tool is that it could discourage developers from using it altogether. The Twitter API is currently one of the most widely used and accessible social media APIs, and it has played a key role in developing many popular apps and services, including TweetDeck, Hootsuite, Sprout Social and IFTTT. However, by adding a monthly charge to access the API, Twitter could potentially make it more difficult and expensive for smaller developers just starting out to build applications and services using Twitter's data.

Another potential problem is that the fee could lead to a loss of innovation and creativity in developing new Twitter-based applications. Many of the most successful Twitter apps and services have been created by small, independent developers who could experiment and iterate quickly without the burden of high costs or bureaucratic hurdles. By introducing a fee, Twitter could potentially limit the number of developers and companies that can work with the API, which could stifle innovation and creativity.

Another possible issue is the possibility of reduced data quality. Twitter's API is currently free and open to everyone, which means that a wide range of developers and applications are using the data. While this can lead to a lot of innovation and experimentation, it can also lead to inconsistencies and errors in the data. Suppose Twitter begins charging for access to the API. In that case, it could potentially limit the number of developers and applications using the data, reducing the overall quality and accuracy of the data.

Furthermore, Twitter could potentially face a backlash from developers and users who feel that the new fee is unfair or unnecessary. While Twitter has the right to charge for access to its data and API, many developers and users may feel that the move is unjustified, particularly if they feel that the quality of the data or the service provided by Twitter is not worth the added cost. This could potentially damage Twitter's reputation and lead to a loss of users and customers, and in the end developers may choose to use other social media platforms that do not charge for their API service, rather than paying to use Twitter's data.

Will it Succeed?

The success of Twitter's new fee for the API tool will depend on several factors, including the fee's price, the data's quality, and the level of demand from developers and users. If the fee is too high, it could deter smaller developers and lead to a loss of innovation and creativity in the development of new Twitter-based applications. If the quality of the data is not up to par, developers and users may not see the value in paying for access. Additionally, if the demand for the API tool is not high enough, Twitter may not be able to generate significant revenue from the fee.

However, there are also several reasons why the new fee could succeed. For one, Twitter has a large and loyal user base, which could help to drive demand for the API tool. Additionally, Twitter has already demonstrated an ability to generate revenue from its data and API, with companies like Dataminr and Gnip [which was purchased by Twitter In April of 2014], paying for access to Twitter's data streams. This suggests that there is a market for high-quality Twitter data, and that Twitter could potentially generate significant revenue from the new fee.

While I can understand Musk’s looking under every rock to generate a sound running model to bring in revenue, there are some rocks to leave as is.

To charge for data access will be a significant setback for humanitarian aid organizations, disaster response teams, groups working to improve the common good and save lives. Other social media platforms don’t have the reach, real-time updating and geolocation features of Twitter.

Elon Musk's plan to charge a monthly fee for Twitter's API tool has the potential but a gamble. Rolling the dice has always been Elon’s method of operation. Time will only tell. 

What can we learn from this story? What’s the take away

Overall, Twitter's plans to charge for its API service have both pros and cons for its customers. While it can improve the quality of the applications that use its data, generate revenue, enhance security, and provide better support for developers, it can also result in higher costs, decreased innovation, limited access to data, and increased competition.

To earn and keep the trust of Twitter users that are still sticking around, Elon may want to reconsider this idea.

Well, there you go. That's life, I swear.

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