Elon Musk, the owner of X, formerly known as Twitter, has unveiled plans to introduce two new tiers of premium subscriptions on the social media platform. In a recent announcement, Musk revealed that one tier would offer a “lower cost with all features, but no reduction in ads,” while the other would be “more expensive, but has no ads.” This development comes as part of Musk’s ongoing efforts to reshape the platform and enhance its revenue streams.
Musk’s vision for X involves offering users a choice between a cost-effective premium option with all the platform’s features, including ads, and a more expensive subscription that grants an ad-free experience. While specific pricing details and release dates remain undisclosed, this strategic move is aimed at diversifying X’s income sources and retaining and attracting users.
Charging New Users and Read-Only Access
In addition to these premium subscription tiers, X has initiated a trial program, charging new users $1 in New Zealand and the Philippines for accessing the platform. Users who opt out of subscribing will be limited to “read-only” actions, allowing them to read posts, watch videos, and follow accounts, but they won’t have full engagement capabilities. This monetization strategy is an attempt to curb spam and bot activity on the platform while encouraging users to contribute financially.
It remains uncertain whether the $1 annual subscription fee for new users is one of the two premium subscription tiers Musk mentioned earlier. However, this test case signifies X’s intent to address issues related to the quality of content and user interactions on the platform by imposing a nominal cost.
Challenges and Revenue Woes
Elon Musk’s tenure as the head of X, which began in October 2022, has been marked by significant changes, including mass layoffs and the dissolution of content moderation teams. While Musk’s objective was to improve the platform, these actions have driven away advertisers. He attributed the decline in advertising revenue, coupled with substantial debt, as a key factor contributing to X’s negative cash flow.
Despite Musk’s efforts to revamp the platform and incentivize users to pay for premium services, advertisers have remained cautious due to concerns about their ads appearing alongside inappropriate content. This has led to a financial challenge for X.
In the broader context, other major tech companies have experimented with various combinations of ad-supported and subscription plans, similar to what Musk is attempting with X. The success of these new premium subscription tiers and their impact on X’s financial outlook remain to be seen as the platform faces increasing scrutiny, including an investigation by the European Commission regarding compliance with new tech rules on illegal and harmful content.