Regardless of what form Twitter Inc.'s planned subscription service ultimately takes, analysts say it is not just about lifting profits.

While Twitter executives recently confirmed the company is working on a nonadvertising subscription-based service, Twitter has so far provided few specifics on what the offering could look like and when it will launch. Recent reports indicated the company might charge some power users for services such as Tweetdeck, which allows users to view multiple feeds and accounts at once, as well as advanced features like "undo send" and profile customization. The company may also charge fees for ad-free feeds, higher-quality videos, account verification and analytics. The company in July 2020 had first hinted at plans to offer a subscription-based service through a job posting.

Twitter touts itself as a site built for rapid-fire dialogue between users, but a sticking point for the company compared to peers like Facebook Inc. has been figuring out how to keep users engaged for longer, analysts noted. Introducing a premium offering unique to Twitter could fill that gap, they said, by attracting new users and boosting engagement from existing ones.

Jason Moser, lead adviser at financial advisory firm The Motley Fool, said in an interview he expects Twitter to roll out some type of long-form newsletter offering, similar to the Netherlands-based newsletter platform Revue Holding B.V. the company bought earlier this year. Revue offers a platform for users to curate content, discover reading material and tools to author and distribute their newsletters. Financial terms of the deal were not disclosed.

In terms of pricing, Moser noted Twitter would need to make the cost "ultimately forgettable" to draw in as many people as possible. Though he does not expect Twitter's subscription offering to significantly boost the company's financials near term, it will allow Twitter to grow its network and gain share as a result.

"Ultimately, it's figuring out ways to grow that network and to keep people engaged ... And if you're presenting a valuable network with all sorts of different offerings that people are interested in, you're going to be able to lock folks in for longer; you're going to be able to bring new folks in," Moser said. "And that's really been Twitter's biggest challenge to-date, is growing their network to compete with the likes of companies like Facebook."

Like most other internet platforms, Twitter derives the bulk of its total revenue from advertising. For the December 2020 period, Twitter posted ad revenue of $1.15 billion, making up 89.6% of the company's entire revenue. The company noted ad demand came in better than expected throughout the just-ended quarter, barring a brief period surrounding the U.S. presidential election in November 2020.

Speaking at a February industry event, Twitter CEO Jack Dorsey said the company's main goal for its subscription service is to provide some sort of "economic incentive" to people contributing to the site, noting that will likely come through a mix of regular subscriptions, content unlocks and users "tipping" people they follow for exclusive content.

"One of the things that I think ultimately people will run into with all these content unlocks and subscriptions is that, I kind of just want a bundle of everything," Dorsey said. "And I don't want to have these one-off kind of relationships. I want to make it much more frictionless and fluid and singular."

Company CFO Ned Segal on a recent earnings call added that the company is experimenting with non-advertising subscription-based revenue streams this year and expects to see revenue materialize from such efforts "in a more meaningful way" next year. But he cautioned Twitter is "still early" in the process.

For his part, Rosenblatt Securities analyst Mark Zgutowicz notes Twitter might offer a subscription tier "for data and analytics that its power users may consider." He sees a paid subscription offering for its core service as "highly unlikely." As a result, the initial total market may be fewer than 10 million users, he said.

For the just-ended period, Twitter's average monetizable daily active users reached 192 million, up from 152 million in the same period a year ago. By comparison, Facebook tallied 2.80 billion monthly active users as of Dec. 31, 2020, an increase of 12% year over year, while daily active users were up 11% to about 1.84 billion.

Whichever subscription model Twitter decides on, it speaks to the fact that slowing user growth has become a growing concern for most social media players, said Daniel Morgan, a senior portfolio manager at financial service firm Synovus, who noted a proprietary offering would "be huge" to Twitter's long-term success.

"Those user numbers are starting to really mature for everybody; it's harder and harder to get additional people," Morgan said.