“Misunderstanding”: Twitter Japan Now Says There Won’t Be A Subscription Model

We reported yesterday about Twitter Japan's plans to start charging followers to view tweets from certain users starting January and explained why this paid subscription model could work in Japan.

Well, please forget it, this won't happen. Just a few minutes ago, Digital Garage (the company responsible for Twitter operations in Japan), issued a press release (English PDF, Japanese PDF) stating there won't be any fee-based services of any kind on the site and that Twitter in Japan will remain completely free for the foreseeable future. There's also a blog post by the Twitter Japan team (who just copied and pasted the press release text, providing no further explanation). Digital Garage says the media reports on their plans to monetize Twitter are based on a "misunderstood presentation by a DG subsidiary, DG Mobile".

We reported yesterday about Twitter Japan’s plans to start charging followers to view tweets from certain users starting January and explained why this paid subscription model could work in Japan.

Well, please forget it, this won’t happen. Just a few minutes ago, Digital Garage (the company responsible for Twitter operations in Japan), issued a press release (English PDF, Japanese PDF) stating there won’t be any fee-based services of any kind on the site and that Twitter in Japan will remain completely free for the foreseeable future. There’s also a blog post by the Twitter Japan team (who just copied and pasted the press release text, providing no further explanation). Digital Garage says the media reports on their plans to monetize Twitter are based on a “misunderstood presentation by a DG subsidiary, DG Mobile”.

So what happened? Kenichi Sugi, not really a nobody but DG Mobile’s COO, delivered a presentation [JP] during a mobile tech conference in Tokyo where he talked about the future of the digital content business. IT Media, one of Japan’s most biggest online media companies, reported in Japanese (quoted in Robin’s article yesterday). The report was later picked up by Japanese media (i.e. Slashdot Japan) as well, as it laid out all the details of the plan: launch in January 2010, monthly fees ranging from $1.16 to $11.60, pay-per-tweet micropayment option, 30% cut for Digital Garage, celebrities as likely candidates to draw paying followers, etc.

So first the company gets into such details and now says it’s all just a misunderstanding? Or is it the (mostly negative) initial reactions by Japan’s Twitter users that triggered this development? Whatever the reason, the payment model is scrapped for now. (We reached out to Digital Garage for a comment.) Asiajin is providing additional background on the relationship between Twitter Inc. and their partner in Tokyo.

On a side note, it would have been interesting to see if paid accounts worked as a way for Twitter to monetize the service in the world’s third largest Internet market. The concept has proven to be successful in similar fashion elsewhere in Asia. Filipinos, for example, can subscribe to their favorite celebrity’s “lifestream” via SMS (not using Twitter but a service called KText). Every time the celebrity in question writes a message to his fans, all subscribers get billed a certain amount and pay via their cell phones. Some celebrities have tens of thousands of subscribers and share the revenue with KText (thanks @mikewalsh for the pointer). This is something Digital Garage had in mind for Japan, too. A comeback of their idea to monetize Twitter isn’t impossible, at least in some places in Asia.

Here’s Digital Garage’s press release in full (”Recent Press Coverage about Twitter Service in Japan”):

In response to media reports stating that Twitter Japan will be launching a

paid-premium accounts service on Twitter, we would like to officially state that this

is not correct. To be clear, Twitter service in Japan is a free service and neither

Twitter Inc. nor Digital Garage, Inc. (JASDAQ code: 4819, headquartered in

Shibuya-ku, Tokyo, Japan, CEO: Kaoru Hayashi, henceforth DG) have discussed

or have any plans for paid-premium accounts. Also to clarify, Twitter Inc. and

DG enjoy a commercial partnership but do not have a joint-venture arrangement

in Japan.

The recent media reports are likely a result of a misunderstood presentation by a

DG subsidiary, DG Mobile, about potential business opportunities that it could

explore as a third party. DG Mobile’s presentation was unrelated and separate

from the Twitter and Digital Garage partnership.

DG apologizes for this misunderstanding and for the delay in correcting the

information. We hope this clarifies our commitment to helping Twitter Inc.

continue to grow and enhance its free service for Japanese users.