A technology expert at Birmingham City University has said that Elon Musk’s proposals to charge verified Twitter accounts a monthly subscription fee will only generate a relatively minor amount of income for the social media giant.
The academic and industry professional said: “Elon Musk’s takeover of Twitter has been typified by chaos, including most recently the firing of a number of senior executives – amongst them the head of legal policy, trust and safety.
As the dust begins to settle, it appears that Musk will increase the cost of Twitter’s existing subscription service, Blue, to $20 per month - including for verified ‘blue tick’ account owners.
“With around 360,000 users currently subscribing, that will bring in just under $77 million per year, assuming 100% take up of the new cost. Given the company’s $5 billion annual revenue, that’s a mere drop in the ocean.
“The big question for Musk and his new team is whether Twitter is a sufficiently compelling platform to attract a large number of paying users. For example, whilst Netflix offers content or LinkedIn offers a premium service, what does Twitter offer? It’s hard to see how subscriptions will represent anything other than a small source of revenue.
“There are bigger issues for Musk. As with other social media channels, advertising represents the bulk of Twitter’s income. New ownership and potential radical changes to the social media giants’ model may also present a risk to that.
“Musk’s objective to make the platform ‘more open’ is likely to lead to an increase in hate speech. That could drive advertisers away, damaging chances for Musk to achieve his broad aims for the platform.
“Elon Musk is a maverick who has succeeded in many different technology-based enterprises to date. Taking on Twitter is a different game though, and with no experience in running a social media platform, he may struggle to position the platform into a profitable model that has eluded it for so long.”