Trademark ignorance is burning Elon Musk’s Twitter to the ground.
More money more problems
October 27, 202, Elon Musk finally acquired Twitter, for $44 billion. The price tag brings with it a desperate need to increase Twitters revenue.
Like most of social media, Twitters main revenue stream is advertising. Despite his efforts Musk can’t force advertisers to spend more on Twitter by shaming them.
Musk quickly turned to another coveted part of Twitter to generate revenue - The “blue checkmark” provided to verified and prominent Twitter-users since 2009.
The blue check has been used to distinguish genuine notable accounts, such as celebrities and organizations, from impostors or parodies. Musk, on the other hand, will provide the checkmark to all users signing up for a “Twitter Blue” account at $8 per month.
This move shows an astonishingly poor understanding of how trademarks generate value.
What’s in a name?
A trademarks core function is to indicate the source of a product or service.
Trademark value is built by providing positive customer experiences associated with the mark such as reliability, low price, high quality, high status, etc. This will make people seek out your mark, and want to associate with it, in turn growing the value of the mark as a great revenue-driver.
The blue checkmark has served similarly on Twitter, indicating that associated account are credible. Comparable to trademarks cousin, collective marks, which can be used by different entities if they fulfil certain criteria.
Confusion is the bane of trademarks and collective marks. This is why they need protection through registration and enforcement to maintain their value. If third parties are allowed to free-ride on the mark you have created, their inferior products and experiences will ruin associations and value of the mark.
The Calls Are Coming from Inside the House
Sometimes however, the biggest threat to the trademark comes from within.
As the value of your trademark is based on peoples associations, the owner cannot unilaterally change its meaning, they must build associations over time.
Worse than a tarnished reputation is confusion. If the public does not know what to associate to a mark, the value is gone.
The move may provide a very short-term gain with more “blue checkmarks” sold for the fun of associating with the old, coveted verification. But when this association is gone, there is no value left.
This is however the least of Musk’s problems. By blurring the lines between real verified accounts and jokers ready to pay $8 for “verified” shitposting, Musk is breaking down the value of the Twitter brand itself.
Instead of generating a new revenue stream, Musk is harming Twitters main revenue - advertisers.
A rose by any other name
Of course, people have pounced on the new ability to parody companies with the added credibility of a blue checkmark, to our amusement.
Musk has directly enabled this tarnishment to potential advertisers. We can only imagine how the affected brands feel about this.
Further, the overall uncertainty surrounding Twitter as a platform is likely to make it a far less desirable for serious advertisers.
Smart people at Twitter have been working for years at on finding the right balance between freedom of speech, fun, and parodies on one hand, and credibility on the other. This balance built the value of both the “blue checkmark” and the Twitter brand.
It is difficult to imagine a more efficient strategy to ruin this value, than Twitters current path under Musk.
Acknowledgements:
Thanks to @JoshuaPHilll for his list of parody accounts using the “blue checkmark”.
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