X, the social network formerly known as Twitter, is evaluating three new levels of its premium service. This would allow the platform to charge users different fees depending on how many ads they view. One more attempt to settle the accounts of the company, which Elon Musk bought last year.
The premium plan would be divided into Basic, Standard and Plus. The only current plan currently costs $8 per month. As a benefit, the social network offers those who subscribe to X Premium – formerly known as Twitter Blue – some extra functions, such as the ability to edit posts or write longer texts.
The proposal for three premium tiers was shared at a company briefing with investors, he told Bloomberg a source who followed the meeting held this Thursday. The meeting was led by executive director Linda Yaccarino, in the position since last June.
It is not clear if there will still be a free option. A couple of weeks ago, Musk had said that he was evaluating the possibility of applying a “small” monthly payment to all users. In a meeting with the Prime Minister of Israel, Benjamin Netanyahu, the tycoon said that this would help him confront the problem of bots on the social network.
Musk had also said last July that cash flow at Twitter remained negative, following a 50% drop in advertising revenue. However, Yaccarino said at the meeting that, excluding the cost of debt, the company already has a positive cash balance.
Will Twitter’s strategy of charging for ads work?
Musk bought Twitter for $44 billion. Bloomberg explains that the change in ownership left the company with a debt of 13,000 million dollars. That and Musk’s haphazard management, which has scared away a large part of advertisers, concerned, among other things, about the security of content on the social network.
Twitter said during Thursday’s meeting that advertising guidelines were returning. He detailed that 90% of the top 100 advertisers were already back. However, they are bringing in less budget than before the sale. Even so, Yaccarino said that they are confident that they will achieve the positive balance, including the debt, in the second half of 2024.
Before the Musk era, Twitter generated almost $5 billion in annual sales. The majority, 90%, came from advertising. Now, estimate Bloombergowes about $1.2 billion in interest payments per year on its debt.
So far, the subscription plan hasn’t added much to solving the financial problem. Nearly 820 thousand users would be subscribed to X Premium, according to data collected by outside researcher Travis Brown, who has tracked membership since its launch.
The new three subscription levels They already appeared in the Twitter application code. The code shows that the Basic plan will include the normal number of ads. The Standard, half the ads. And the most expensive option will not show any ads.