After two weeks of battling it out with Twitter management, the Elon Musk Twitter Drama has left the platform in a current state of limbo as the deal approaches its final leg. This will eventually make Musk the big dog at a new private Twitter, which may or may no longer run ads; may or may not allow all types of racist, homophobic, and abusive speech; and may or may not make money.
There’s little to go on right now and any initial impacts identified are all likely based on loosely cobbled-together estimates. The most we can be certain of is that the platform’s future is still pretty much unknown and that Twitter employees grow increasingly nervous about their jobs. However, we were able to gather enough information to hint at the possible changes that Musk plans to introduce to the app.
Twitter Inc.
Though hardly a ‘shrug’ when pitted against Musk’s total net worth, Twitter is still no charity – Musk is no doubt looking for ways to maximize the platform’s revenue intake, at least to recoup some of the cost. In a recent interview, Musk said that he doesn’t care at all about the deal’s economics, but when has any billionaire really not given a hoot about a multi-billion dollar affair? Tesla’s head honcho still has to keep making money too, right?
Increased Subscriptions – Musk supposedly aims to build Twitter Blue into a registration layer of sorts. Users would pay a monthly fee to essentially get a verification tick confirming that they’re a ‘real person’. This would help tackle Twitter’s bot issue and if Musk were to charge a dollar per month for such a feature, then that would equate to $229 million per month – a $2.7 billion per annum amount, given Twitter’s current user count.
Twitter Privatized – Taking Twitter private would help alleviate some of the revenue pressure, ensuring that company decisions are free of external ‘interferences’. While this would help it achieve a more ‘Free Speech’ environment, it would also mean less reliance on ads as advertisers would be wary of inciting those who might find their content offensive.
Zero Ads – This ties into the above statement. Twitter would no longer be able to rely on ads and must find alternative income sources. Ads make up about 98% of Twitter’s current revenue, making it a rather big hole to fill should they suddenly be removed. Besides obvious shortfalls, the complete removal of Twitter’s ad revenue model would also mean several implications for certain staff. More into this later.
Charging For Tweet Embeds – A bit of a stretch, but Musk also seems to fancy the idea of charging websites for embeds of Tweets from verified users. This gives high-profile users more incentive to Tweet more often, knowing that they can earn a few more extra dough from simply Tweeting. It could be a good supplemental way to spark more engagement for the app.
Make Twitter ‘Pay To Play’ – Now this is more of a radical move. Musk himself hasn’t proposed the idea, but aligning with his new verification idea, he could simply gate Twitter use behind a paywall. It sounds very counterintuitive, especially when platforms like Facebook and Instagram offer similar services for free. Despite this, Twitter is a critical platform for many journalists and those who use it are often the most active within their respective industries. Those who have come to rely on Twitter for daily use would most likely pay if it meant keeping access.
Cost Cutting – This is what ties into Twitter being ad-free – without needing to run ads, related staffing and admin costs would also be reduced. $1.7 billion was spent by Twitter last year on marketing and general admin cost, while an additional $1.2 and $2 billion went into ad research and development and infrastructure respectively. Without ads, these costs would significantly go down.
The Wrap
Just to be clear, Musk pitched these ideas in closed meetings to secure funding for his Twitter bid, making it rather difficult to get a bead on his actual plans for Twitter. It’s likely that this is where Musk will direct the big changes he has in store for the company, with CEO Parag Agrawal noting several opportunities in an all-hands meeting this week. It’s high time Twitter made major changes anyway, so perhaps this unorthodox method of development by Elon Musk just might end up changing Twitter for the better. Fingers crossed.
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