Why A Twitter Subscription Service Won't 'Move The Needle'

Twitter Inc TWTR is reportedly looking to build out a new subscription service, but Loup Ventures' Gene Munster isn't particularly bullish on any prospects.

Niche Service: Twitter already sells data to multiple organizations and this subscription-like business represents 15% of the total business, Munster said Wednesday on CNBC. If Wednesday's reports of a new subscription service are accurate, it would likely consist of similar "niche related" and packaged as a consumer-facing data subscription service.

Twitter would likely service 10 million users at $600 a year and it would generate an incremental 0.2% to revenue, he said. This is not large enough to "move the needle" and justify a valuation gain.

Don't Mess With Twitter's Core Product: If Twitter's subscription package were to consist of requiring users to pay to better access news, Munster said it would "cause anarchy" among its base. Twitter can't mess with its most important product and would open the door to competitors.

TikTok Ban: If the U.S. government bans TikTok, the Chinese government can retaliate by making it more difficult for American companies as a whole to operate in the country, Munster said. But banning TikTok wouldn't be without precedence as China already bans nearly every social media company from operating within its borders.

Also, it's "highly probable" the data collected by the TikTok app "gets back to China."

"It makes sense for the U.S. to ban TikTok," he said.

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