This week, Twitter will remove blue ticks for users that aren’t paying for them. It should be noted that Musk sees this subscription offering as a means to address the company’s challenges with both bots and revenue in one fell swoop.
As part of his initial steps in his takeover at the app, Elon outlined his new vision for Twitter Blue, charging $8 for verification check marks in the app, something that many users have wanted access to for years.
We understand that the program makes financial sense with millions of $8 programs amounting to a lot of cash. Nevertheless, in having to pay for a blue tick, you erode their only value – it’s essentially a process that will eat itself over time, which will make it a much harder sell ongoing.
Musk has several reasonings behind this, in his eyes at least. He sees paid verification as a means to tackle the platform’s bot problem, because spammers and scammers won’t be able to create massive networks of bots if they have to pay $8 per account to do it. That’s the secondary element – if Twitter can maximise subscription take-up, that will eventually force more users to have to buy a verification tick, or risk being viewed as a bot account. Eventually, at a critical mass, that will ideally mean that the only accounts remaining without a checkmark are bots, making it very easy to see who can and can’t be trusted in the app.
The main issue is that most users are simply not going to pay $8 for a JPEG of a blue tick. This is the element that Elon has seemingly over-estimated – in all of his exchanges and comments, Musk seems to be of the belief that he is exceedingly popular with the public, that he’s more in touch with the common person than other billionaires, and that his perspective reflects that of the everyday, common sense person.
Elon’s early view was that subscriptions would, eventually, make up 50% of Twitter’s overall revenue intake. Based on Twitter’s performance reports before Elon took over, that would mean that he’s hoping that Twitter Blue will bring in around $590 million per quarter for the company. That would require around 24 million users signing up to pay Elon and Co. $8 per month for a blue tick. As for now, Twitter Blue, which is now available in all regions, has around 450,000 paying subscribers, based on analysis. Twitter’s hoping to juice this with its new Verification for Organizations, which will see companies charged $1,000 for a special gold checkmark in the app, while the removal of ‘legacy’ checkmarks, as noted, will also, ideally, push a few of those users to also start paying up to keep their blue tick.
Where users are unlikely to want to pay $8 a month for a blue tick, very few brands are likely to fork out $1,000 per month for virtually nothing more than a coloured tick in the app, while there are currently only some 420k users that have a legacy blue tick.
Despite its negative reception, Musk is still adamant that it’s the way forward. “Given that modern AI can solve any “prove you’re not a robot” tests, it’s now trivial to spin up 100k human-like bots for less than a penny per account […] Paid verification increases bot cost by ~10,000% & makes it much easier to identify bots by phone & CC clustering” he said only yesterday.
Additionally, in a meeting with staff last week, Musk said that he sees a ‘clear but difficult path’ to Twitter reaching a $250 billion valuation in future. Applying basic valuation maths, that would suggest that Musk envisions Twitter bringing in around $62b per year sometime soon.
If he is to stick to the 50% target for subscriptions, that would mean that Musk is eventually aiming to have 968 million people sign-up for Twitter Blue. Twitter currently has 253 million active users, total.
