X appears to be close to launching its new pricing tiers for X Premium, including an ad-free subscription option, with details in the back-end code of the app now pointing to three versions of the X Premium package.
As you can see in this example, posted by @aaronp613 on X, the updated X codebase now refers to:
X Premium Basic – Users in this lower priced tier will see full ads in their feed
X Premium Standard – This is seemingly the current version of Premium, with half ad exposure
X Premium Plus – As per the notes, these users, on a higher priced package, would see no ads in-stream
In essence, X is looking to spark more interest in its subscription offering by making it cheaper for people to buy a blue checkmark, though they won’t get all the same benefits as the current $8 per month version. It remains to be seen if they’ll even get a blue tick, though presumably, the stripped-down, cheaper version of X Premium would still include the marker of paid verification.
However, it’s the no ads version that’s likely to spark the most discussion and interest.
Meta, TikTok, and X are currently all exploring ad-free subscription offerings, as a means to drive more sign-ups for their subscription plans, though the actual motivation may not be new revenue streams, as such, but could be more specifically tied to evolving privacy rules in Europe.
As reported by The Washington Post, the move towards paid, ad-free access could actually align with EU rules on data collection, which essentially require social apps to offer a means for users to opt out of data tracking for personalization, if they so choose. By providing a paid option, that may enable each company to keep using data tracking tools, as users would technically then have a way to opt out. But rather than Apple’s iOS 14 update, which lets users simply block app tracking for free, the companies would be looking to make you pay for that privilege.
That would then ensure that they can keep making money, while also aligning with the evolving laws. In which case, the actual take-up of subscriptions themselves would be less of a focus, as it would be more about the platforms maintaining connection to those precious data insights.
Which could also be the motivator in X’s case, though X is also looking to boost subscription take-up, as part of its broader development plan.
X owner Elon Musk noted last month that new pricing tiers are coming for X Premium, as it looks to spark more interest in its subscription package, while Musk has also hinted at pushing more users towards paying to access the app, as a means to combat the rise of bots and AI-generated spam.
Though for clarity, Musk didn’t specifically say that X would be looking to charge all users for access.
What Elon said was:
“The single most important reason that we’re moving to having a small monthly payment for use of the X system is that it’s the only way I can think of to combat vast armies of bots.”
In order for that to work, Musk would need the majority of users to start paying, which implies that he’s likely considered implementing charges for everyone. Or that X is going to try and incentivize more take-up through enhanced subscription offerings, though it’ll have a big task on its hands, given that only 0.43% of X’s users are currently paying for a checkmark in the app.
Pricing, and subsequent revenue implications, could also be difficult.
Based on internal insights, X currently generates around $US12 per user, per month based on ad exposure, so it would need to be priced at least that high, and likely higher, to eliminate the need for ads entirely. That calculation would also change depending on how many users sign up, as the overall ad exposure figures will shift, maybe significantly, altering its models.
It may also have implications for creators who are taking part in X’s ad revenue share program. Right now, creators are able to earn a share of ads served in the replies on their posts, but only ads shown to X Premium subscribers count.
If a significant number of Premium users upgrade to the ad-free package, that’s less revenue share for creators, unless X can also work out a way to build that into the pricing for this new “Plus” package as well.
(Note: X News Daily has reported that the ad-free option would only remove ads from your “For You” feed, not form reply streams)
Either way, it’s a pretty complex equation, and X hasn’t seemingly worked out all of the details of its payments process as yet.
Sorry, this should be more stable over time. Revenue share is still very much beta code.
Worth noting that only verified users (aka X Premium subscribers) count for ad revenue, otherwise it’s trivial to game.
— Elon Musk (@elonmusk) September 2, 2023
X’s expanded revenue push adds some interesting elements into the social media business mix, but thus far, it’s hard to consider them a success, or to measure how they might evolve into more significant elements.
But if X can get the motivations right, and get more people signing up, then it could be a path towards addressing its bot problems, and maximizing human interactions. No platform has been able to make this work at scale as yet, but it’ll be interesting to see how X looks to market this next stage for its Premium offering.
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