"We're introducing this product with the intention of scaling it up to as many merchants and fans as there are in the world," Hubbard tells Billboard the day before the program was announced, "but we're starting small. Tomorrow it will start with a small percentage of our user base and the number of artists that you see, but in the coming weeks and months it will ramp up from there."
In announcing the "test" on the Twitter blog, the site says users will get access to offers and merchandise unavailable elsewhere, and "can act on them right in the Twitter apps for Android and iOS; sellers will gain a new way to turn the direct relationship they build with their followers into sales." Twitter is partnered with commerce sites Fancy (@fancy), Gumroad (@gumroad), Musictoday (@Musictoday) and Stripe (@stripe) as fulfillment platforms in the initial test, and says more partners will follow.
For example, an artist might tweet an offer for a limited-edition t-shirt exclusively for that artist's followers, and users can buy directly within that tweet, without ever leaving Twitter. Consumers enter their payment info when they sign up, that data is stored securely and can be edited or deleted at any time, and for subsequent purchases "with just a few taps, you've purchased that product and it's on its way to your inbox or front door," Hubbard says.
While there are brands and charities involved in the program, "there are a large number of artists we're working with as a part of this test, and there is a reason for that," Hubbard says. "Twitter brings artists and fans together like no other platform can, and this gives artists the ability to reach and connect to not just the fans that follow them, but all of the fans who are having a conversation about them. The point of this in large part is to bring together artists, first and foremost -- along with brands and charities and others -- more closely with their fans, and to help fans in a really easy and simple way connect with the artists that they love."
Indeed, simplicity is the cornerstone of Twitter's entree into the music commerce world, and the process is so simple it begs the questions of what took so long, and why now? "Twitter's focused on it, that's why," Hubbard answers. "Until Twitter, there really hasn't been a platform that allowed artists to build those direct, one-to-one connections with their fans at scale. There are always going to be reasons and needs to work with distribution partners to help get broader reach for your product if you're an artist. We think this is a really powerful tool for artists in the evolution of the connection between artists and fans."
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Hubbard points out that partners like MusicToday, GumRoad, and Fancy have long histories as direct-to-fan platforms, but interfacing with Twitter will give these platforms a much broader base. "They know how to handle logistics and customer care," he says. "But the struggle that I think a lot of direct-to-fan platforms have had is distribution, and reaching a wide-scale audience of followers. Well, that's exactly what Twitter is, Twitter is the place where quite literally millions of fans connect with the artists that they love. What we've done is create a way for artists to have that direct conversation with fans, and now, when it's appropriate, to turn those conversations into transactions in a way that's fun and meaningful for fans and feels right for the artists."
While streamlining the purchase process historically improves sales, one shouldn't expect artists to begin incessantly hawking their wares on Twitter. "There's a self-regulating process that happens on Twitter, which is if you're alienating your followers, they're going to leave," says Hubbard. "It's the same approach that Twitter has taken as a whole with native advertising; we had to find ways to bring advertising into the platform in a way that enhances the experiences, and doesn't detract from it. That's what [Twitter revenue chief] Adam Bain and his revenue team has really innovated on, it's why Twitter has become the business that it is, because we've figured out how to do that well. Similarly, artists, brands and charities have to do the same thing. This is just a tool that closes the gap between discovery of a product and the actual conversion moment."
Hubbard says the initial round of participants in the program is "certainly much smaller than the interest or demand is, and that's because we want to make sure we're building a really great experience for our users. So we're starting small to test the waters, to make sure that the experience is really great for everyone involved, and then, when things are working, we'll begin to roll it out fairly quickly. I think as we move into Q3 and Q4 you'll see us scale up the number of artists working with us significantly."
Typically, e-commerce facilitators receive a per-transaction fee as a revenue model, but Hubbard declined to discuss details of how the Twitter e-commerce model will work, though he did say "it's not costing the artists any more to work with us. The truth is we're testing a bunch of different monetization models, but we're not really focused on that right now. Our focus is building a really great user experience that lets fans buy in the most fun and easy way possible, and building a really great artist onboarding experience so that it's easy for them through whatever direct-to-fan platform they use to sell directly to the fan base on Twitter."
Nathan Hubbard on Bringing Commerce to Twitter (Q&A)
In the three years since Twitter launched its ad products, the native ad model it pioneered has become the standard for integrating ads into a social platform, with thousands of advertisers now using the service. Twitter's revenue growth, $312 million last quarter, up 124% year-over-year, speaks to the success of the platform. Hubbard says Twitter has been working toward delivering e-commerce for music since he came to the company a year ago. Twitter programs like Amex Sync, Starbucks Tweet-A-Coffee, and Amazon Cart "have all been deliberate tests to understand how consumers and our users interact with commerce on Twitter. What we're launching today [Sept. 8] is really the culmination and the evolution of a lot of that work, based on a bunch of the learnings that we took from those initiatives."
Much of these early efforts around music will be for physical goods as opposed to music downloads, Hubbard says, but Twitter sales could impact the Billboard charts down the road. "You'll see a lot of merch and less music out of the gate," he says, "but when we sell music, those sales will be Billboard charting. We'll have a variety of partners through whom we sell music. Out of the gate you're going to see more physical goods, VIP experiences, and things like that."
Artists, brands, labels, and others selling goods and services through tweets will gain a deeper understanding of their audience, Hubbard believes. "This lets them have a one-to-one relationship with everyone who's buying the album, who's in the venue that night for the show, or who is having a conversation about that artist and may not have fully moved down the purchase funnel to buy something from the artist," he says. "It allows the artist to reach that person at whatever stage they are in the discovery process and turn them into a fan and into a customer."
Hubbard has pretty much dedicated his career to direct-to-fan sales in one form or another. He got his start building MusicToday with Red Light Management's Coran Capshaw, moving to Live Nation and then Ticketmaster following the merger of the two, and has been on the forefront of mobile/digital marketing and sales since its infancy. Twitter would seem a natural channel to move tickets via the new commerce tool, and Hubbard's background gives him unique insight into that sector and how Twitter might make noise in that market.
"[Ticketing] is something that we know a lot about," Hubbard says. "What's great about this [e-commerce] product is it's built to sell anything. The history of Twitter is we create these products and we put them in the hands of our users, and they teach us the best use cases. We've built this, and we're going to put it into the hands of artists, and we're going to see what they do with it."
Ultimately, Hubbard's title at Twitter indicates he's at the social media behemoth to help it sell stuff -- lots of stuff. "We think about commerce as being a stand-alone proposition for why you use Twitter," he says. "Our mission is to build a business that parallels the amazing growth of the advertising business. As a company, we're trying to reach every person on the planet, and these are tools that are designed to help the artists on our platform do exactly that."