The IT Nerd

Elon Musk sees advertisers as a problem when it comes to him running Twitter. Thus he wants to reduce his reliance on advertisers In fact, this is his ideal revenue split:

Musk has said he wants subscriptions to account for 50% of Twitter’s total revenue, according to a message by a VP on an internal company slack.

The message, which was shared on Twitter by Platformer’s Casey Newton, said Musk thought the subscription aim “could help with conversations” and “pay by credit card could help with bots.

There’s two big problems. The fact that advertisers are fleeing the platform isn’t helping this as it reduces the revenue that he has coming into Twitter’s bank account while he makes this transition. And second, there’s the fact that it is very unlikely that Twitter Blue isn’t likely to catch on:

However, a survey from The Harris Poll, a global market research and consulting firm, found half of frequent US Twitter users said they would ditch the platform if it came with a monthly subscription fee.

The firm polled 2,063 US adults, 1,212 of which were Twitter users, from October 20 to October 28, the week Musk took over the company.

Pinar Yildirim, a professor of marketing and economics at The Wharton School, told Insider introducing a subscription model to Twitter could even drive users away from the platform. Yildirim said many users were waiting to see if Twitter becomes subscription-based.

“Worries about subscription changes have caused some users, either of higher status like some celebrities or ordinary users, to express a desire to potentially explore other platforms,” she said. 

“If in the end, the revenue model becomes such that everyone on Twitter has to pay a price,” she said, “that’s going to result clearly in a movement of users who may find it too expensive to simply be on Twitter.”

Well, that’s a problem. Then there’s the fact that the loans that Musk took require a $1 billion interest payment. But…:

If Musk wants to generate enough revenue to pay the $1 billion in interest owed on Twitter’s debt each year, it would need to add about 10 million more paying customers, according to social media expert Matt Navarra. 

I cannot honestly see how Musk squares this circle. With companies not advertising on Twitter, because they don’t need Twitter and Twitter needs them, there’s zero chance that Twitter Blue will make up the difference, Twitter is screwed and so is Musk. But I will guess that we will see this coming Friday as that is when Twitter Blue launches.

This entry was posted on November 27, 2022 at 9:12 am and is filed under Commentary with tags Twitter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.