Elon Musk’s grandiose plans for Twitter have always kept netizens at the edge of their seats. The billionaire entrepreneur has time and again expressed his desire to make the social media site a money-making entity, without the aid of advertisers. According to the latest reports, step one might involve raising the Twitter subscription fees for brands.
The Information reported that Twitter is likely to charge companies $1,000 a month to keep their gold verification badges and $50 each for every affiliated account. The messages reviewed by the publication indicate that the plan is still in its developmental stage and subject to change.
Currently, monthly Twitter charges stand at $2.99, $4.99, and $9.99. Content creators can choose the monthly price for their subscription depending on their needs. There are no free trials of subscriptions.
So, from something as little as $2.99, why is CEO Elon Musk considering a Twitter charge of $1,000? Is it even feasible? And will Twitter’s high subscription fees push users towards Mastodon or other social media rivals?
In this piece, let us delve into Musk’s ideas for cost-cutting and Twitter profitability.
Twitter subscription fees
Musk’s gamble with Twitter subscription fees is eerily similar to a game of Russian roulette. He has repeatedly tried different pricing structures and verification schemes, hoping to find one that will stick.
But an alleged rise in misinformation and hate speech has so far thwarted most plans to turn Twitter into a money-making machine. Twitter layoffs combined with policy changes have also given the blogging site’s reputation a beating. Musk has also struggled to hold on to advertisers after taking control of the platform.
In 2021, advertising accounted for almost 90% of Twitter’s revenues but has since fallen after Musk’s Twitter takeover. He announced in late Jan 2023 that the site will offer ad-free options to users in the coming days.
Ads are too frequent on Twitter and too big. Taking steps to address both in coming weeks.
— Elon Musk (@elonmusk) January 21, 2023
Ad-free in Musk speak stands for higher subscription fees. Within the last few months, the CEO has changed subscriptions plans twice and now, indicated that he has other plans in the pipeline.
The latest information suggests that the billionaire wants to milk $1,000 as subscription fees from brands to allow them to hold on to their golden badges. Every affiliate account will be charged $50. Talk about things worth their weight in gold.
Revenue Generation
To reduce costs and increase profits, Musk started off by laying off nearly half of Twitter’s workforce. The CEO even hosted virtual garage sales, selling off Twitter office paraphernalia, including office chairs, TVs, and a giant sculpture.
He has also shut down Twitter offices around the globe and has reportedly stopped paying rent for the San Francisco headquarters. But none of this is a permanent solution to sustain the bleeding social media platform.
Unless there are systems in place that will generate monthly revenue, Musk will be left with a social media service with fewer daily users. To arrest this, the CEO knows that he must work on providing an interesting Twitter subscription model and attract advertisers by driving up user count.
Impact of Twitter Charges And Social Media Services
As Twitter brings in an added layer to social media, which has inherently been free for users, let us delve into how companies make money.
For most part, companies charge advertisers for access to a niche audience for their products. Both Facebook and Instagram, owned by Meta, charge companies for maintaining a business presence on the platform. Advertisers can set budget limits for each ad and the company is charged based on the impressions they need. The budget is not the actual amount you spend, rather the limit. The actual amount spent depends on the performance of the ad.
Snapchat offers a chance for anyone to be an advertiser, for as little as $5. Increasing your advertising budget gets you greater visibility and reach.
Meanwhile, TikTok’s model is slightly similar to Facebook with advertisers shelling out dollars per 1,000 views. The price starts at $10 and the company requires you to spend a minimum of $500 on one campaign. The social media platform is extremely popular between the 18- to 24-year age group and has seen a rise in advertising spending.
Pinterest lets advertisers set a billing threshold of whatever amount they are comfortable with and bills them at the end of the day. This depends on the ad’s performance and customers can customize it according to their requirements.
LinkedIn is the perfect tool for professional and personal branding and sales generation. The company’s LinkedIn Premium Business model helps sales professionals generate leads for around $59.99 per month or $578.88 annually.
The Jury is Still Out
No social media platform charges users for verification or offers different experiences for a subscription. The ones that do partly function as a streaming service. With Twitter subscription fees, Elon Musk might set a precedent where discerning social media users have greater control over what they see and advertisers can battle misinformation by using the verification option.
Just like streaming services have slowly started offering ad-supported models, Twitter’s subscription charges might set into motion a new wave of changes on social media. Those who wish to use social media strictly to stay in touch with friends and network might take up Musk’s idea of an ad-free but paying model while others might be comfortable with advertisements popping up on their timelines.
Only time will tell whether Musk’s move will push people away from Twitter or finally turn its fortunes around. So far, there has been no formal announcement by the company on new subscription charges.
