Sources: Elon Musk pitched charging most or all Twitter users for a subscription; internal estimates show Blue could lose the company ~$6/user/month in the US

Will he go through with it? PLUS: Botched layoffs, how the new Blue could lose money, and more

Platformer 2022-11-08 Casey Newton

Context & Ripple Effects

Musk had previously framed Blue around a lower-priced, ad-free service with an authentication checkmark; the subsequent $20 verification proposal shifted the product toward a more aggressive revenue test. Related reporting also said Twitter planned to remove Blue's ad-free publisher articles, narrowing the bundle as the price discussion intensified.

The reported per-user loss estimate makes the subscription push more than a question of uptake: Twitter must reconcile Blue's price, benefits, and delivery costs before using it as a broad revenue base.

First-order effects

Twitter's Blue team faces immediate pressure to redesign pricing, benefits, or operating costs because the reported US unit economics would make additional subscribers loss-making.
A move to charge most users would turn access to Twitter from a largely ad-supported service into a paid proposition, affecting both existing Blue subscribers and the wider user base.

Second-order effects

Removing publisher-provided ad-free articles while pursuing higher subscription revenue leaves Twitter with verification as a more central Blue benefit, increasing the importance of whether users value it enough to pay.
Publishers that supplied ad-free articles to Blue lose a distribution benefit if Twitter ends that feature, while Twitter reduces a component of the subscription bundle it does not fully control.

Third-order effects

If Blue's economics remain negative at scale, Twitter's subscription strategy will be constrained by the subscription scale trap: growth adds revenue but can also deepen losses unless the product's cost structure changes.
The sequence points to a broader platform monetization trade-off in which paid verification and subscriptions are tested as ad-revenue supplements, but their durability depends on retaining benefits while achieving positive unit economics.

The trend: Twitter's Blue experiments illustrate platforms testing subscriptions and paid identity features while confronting the gap between headline pricing and sustainable per-user economics.

Discussion

Vox Rani Molla on x
Twitter's case study of how not to lay people off
@caseynewton Casey Newton on x
More news from Twitter today: Elon Musk and David Sacks have both discussed putting all of Twitter behind a paywall eventually, @platformer has learned https://www.platformer.news/ ... https://twitter.com/...
@shaun_vids Shaun on x
musk's basic problem is that twitter was not being run by lefty sjw types surpressing free speech, it was being run by business people who were trying to make money. with the same aim he'll end up trial-and-erroring his way back to their exact policies
@nickstatt Nick Statt on x
Just absolutely jaw-on-the-floor reporting in @CaseyNewton's latest @platformer newsletter about the turmoil inside Twitter. I kept reading paragraph after paragraph thinking it could not get any worse. https://www.platformer.news/ ... https://twitter.com/...
@zoeschiffer @zoeschiffer on x
Elon Musk has seriously discussed putting all of Twitter behind a paywall, and the company could lose $6b in ad revenue with a change Musk added to the new Twitter Blue subscription at the last minute: https://www.platformer.news/ ...
@ow Owen Williams on x
@CaseyNewton @platformer LOL you buried the lede I'm dying here https://twitter.com/...
@clarajeffery Clara Jeffery on x
every paragraph ins this piece is gobsmacking but lets begin with these: https://www.platformer.news/ ... https://twitter.com/...
@theinnersunset Awais Imran on x
.@CaseyNewton have you seen this? someone projected this on Twitter HQ a few hours ago. 😆 Source: r/bayarea https://www.reddit.com/... https://twitter.com/...
@eliothiggins Eliot Higgins on x
$8 a month might put off bots trying to sell pills and bitcoins, but if you're a state actor trying to influence elections, it's an absolute bargain.
@jordanuhl @jordanuhl on x
lol this is insane https://www.platformer.news/ ... https://twitter.com/...
@joshtpm Josh Marshall on x
Amazing. New insight into the trio of desperate and lost tech bros now running Twitter. They've seriously discussed putting the entire site behind a paywall. https://www.platformer.news/ ... https://twitter.com/...
@oo_ngi Tasha on x
“how is this app for free?” SHOULDVE KEPT YALL MOUTHS SHUT https://twitter.com/... https://twitter.com/...
@tszzl Roon on x
100k active subscribers 😭😭 omg https://twitter.com/...
@schizoidfujo @schizoidfujo on x
if twitter just all goes to shit we should all just start tweeting suspension worthy tweets and see each other disappear like the strawhats in sabaody archipelago https://twitter.com/...
@paultassi Paul Tassi on x
They may put all of Twitter behind a paywall, according to this Like, the whole thing https://twitter.com/...
@q_review Quinton Reviews🎬 on x
we must bully him into doing this, so we can all get lives https://twitter.com/...
@nberlat Noah Berlatsky on x
basically Musk's plan to cut ads for blue subscribers means that for each user, blue actually costs twitter money in ad revenue. Musk is essentially paying people to get a fake verification badge. which they have to pay for. https://twitter.com/...
@arossp @arossp on x
This will not earn him enough to pay off the Saudis. https://twitter.com/...
@therealhoarse @therealhoarse on x
Utter cluster. https://www.platformer.news/ ...
@jayrosen_nyu Jay Rosen on x
It's eerie how similar this is to the Palm Beach Troll. From @CaseyNewton's newsletter, Platformer. https://www.platformer.news/ ... https://twitter.com/...
@alexandraerin Alexandra Erin Parody on x
Ahaha. Elon Musk has inverted the free lunch principle: charging users an inflated price for Twitter Blue but cutting the ads we see means *everybody loses*. We pay more, Twitter loses money, advertisers get less value. There is no winner. https://twitter.com/...
@libbycwatson Libby Watson on x
alright but this sounds great. they can just gossip on slack and read websites all day. there's loads of websites to read. enjoy it while it lasts! https://www.platformer.news/ ... https://twitter.com/...
@guslivesagain @guslivesagain on x
this shit ain't worth it bye bye everybody https://twitter.com/... https://twitter.com/...
@kevinriggle Kevin Riggle on x
“All of this took place against the backdrop of a company that still has yet to hear anything official from Musk, via email or a companywide meeting.” ...Wait is he managing Twitter *BY TWEETING*??? https://twitter.com/...
@oneunderscore__ Ben Collins on x
The Something Awfulization of Twitter. https://twitter.com/...
@bobbybigwheel @bobbybigwheel on x
I actually think there's room for upsells here if you want to charge people to post pictures/videos/gifs, etc. but this is hilarious and honestly seems like what you'd be doing if you wanted to stifle a website where ideas you don't like are popular https://twitter.com/...
@hyperplanes Matthew Martin on x
elon is just out there shooting from the hip without even knowing the sign on these effect sizes https://twitter.com/...
@mat Mat Honan on x
Today's Platformer is genuinely one of the craziest dailies I've ever read. It's got like six novels worth of plot crammed into a daily beat story/email. And there was a lot it didn't even get to! Cannot even imagine the mess that's coming tomorrow https://twitter.com/...
@theashrb Ash on x
That's going to kill this app once and for all https://twitter.com/...
@ashleylatke Ashley Lake on x
All of the options besides keeping things mostly as they are but allowing sex workers to charge people for porn are seeming more & more bonkers & undo-able day by day Twitter should just hire all the sex work devs from all the little sites that keep getting shut down by banks htt…
@byajperez A.J. Perez on x
Musk is trying all the tactics struggling newspapers have. Enter: metering. “One such plan might allow everyone to use Twitter for a limited amount of time each month but require a subscription to continue browsing.” It took days for Twitter to actually morph into Gannett. https:…
@jrhennessy James Hennessy on x
- wait, it's all SomethingAwful? - always has been https://twitter.com/...
@soledadobrien Soledad O'Brien on x
In retrospect, probably shoulda just paid the 1B fee to NOT buy it. https://twitter.com/...
@tomaxwell Thomas Maxwell on x
People always say things like “I'd pay $10 a month for ad-free Instagram” not understanding that at least in America, Facebook probably makes more than that from ads! https://twitter.com/...
@greg_doucette T. Greg Doucette on x
$1/mo would be financially sustainable and enough users would do it that Twitter would survive The problem is you'd lose the ability to share URLs outside of Twitter, which limits its appeal to news outlets and other venues that drive traffic to Twitter https://twitter.com/...
@waywardwinifred Fred on x
Imagine spending $44 b on an app that could lose $6 b of ad revenue & the solution you come up with is to get EVERYONE to pony up a few bucks for the privilege of watching you get cyber bullied ? Ok, I'll Venmo you a dollar for the laughs. https://twitter.com/...
@maxkennerly Max Kennerly on x
The train wreck continues. They're so rich they're like extraterrestrials trying to understand human behavior. If a pop-up appears telling us we have to pay for more Twitter time this month we'll consider it a sign that it's time to log off. https://twitter.com/...
@bydavidgardner David Gardner on x
Pivoting to video? Putting everything behind a paywall? If Elon Musk goes any further backward in media monetization ideas, he's going to propose printing out all the day's best tweets and mailing them to readers https://twitter.com/...
@michaeldweiss Michael Weiss on x
Yesterday's techbro conceit was that the marketplace of ideas should be a diverse and lively affair, unencumbered by elite intervention. Today's it's you can't handle the truth if you can't afford it. https://twitter.com/...
@carnage4life Dare Obasanjo on x
As I've mentioned before, subscriptions aren't a replacement for ad revenue for social apps. For most, they're mainly a way to make up for lost ad revenue to Apple's ATT unless the price is fairly high (e.g. $12/month for YouTube premium). https://twitter.com/...
@rothschildmd Mike Rothschild on x
Again, Musk and his advisors have no comprehension that most people on Twitter rarely post, have few followers, and use it for breaking news and to follow celebrities or sports teams. Those people will see a pay wall and go elsewhere. https://twitter.com/...
@jmpsimor Jessica Simor KC on x
Surely this would be its death knell? https://twitter.com/...
@chuckwendig Chuck Wendig on x
The public square becomes a private club. https://twitter.com/...
@pati_gallardo @pati_gallardo on x
How to buy something for $44 billion, drive its value into the ground and sell the ashes for nothing. https://twitter.com/...
@elonmusk Elon Musk on x
Twitter usage is at an all-time high lol
@alexeheath Alex Heath on x
Something else: Musk was originally planning for Twitter's paid verification subscription to require that existing verified accounts ALSO pay or lose their checkmarks. Now Twitter is saying that paid verification “will not affect existing verified accounts at this time”
@caseynewton Casey Newton on x
More news: Twitter Blue only had around 100K active subscribers, and if the company goes forward with its plan to reduce ads by half the new Blue could actually LOSE Twitter money, at least in the US https://www.platformer.news/ ... https://twitter.com/...
@alexeheath Alex Heath on x
Twitter's user growth hit “all-time highs” last week, according to an internal sales team FAQ I've seen. The company has added more than 15 million daily users since it stopped reporting financials in July. https://www.theverge.com/...
@kantrowitz Alex Kantrowitz on x
Reality TV has serious appeal https://twitter.com/...
@shiringhaffary Shirin Ghaffary on x
so much for everyone fleeing Twitter (if what the company is telling its sales team is accurate) https://twitter.com/...
@somospostpc Alex Barredo on x
@Techmeme @alexeheath so: the last month, according to Elon and his cadres: the mDAU were faked, now they're not only real: they're better than ever
@byyourlogic @byyourlogic on x
some totem in his house contains Lowtax's spirit and he is ultimately going to obliterate about $2 trillion of equity and connected companies as a result https://twitter.com/...
@quinnypig Corey Quinn on x
“A whole bunch of people are gathering to watch the trainwreck; would you like your logo to be prominently featured on the caboose?” https://twitter.com/...
@mattdpearce Matt Pearce on x
Twitter is an ailing newspaper. https://twitter.com/...
@emilygorcenski Emily Gorcenski on x
Incredible, so a feature that had 100k users (and wasn't global) increased its price by 60% while also announcing features that would severely limit user freedom, lost the company unrecoverable revenue and will, at best, earn under $10m/yr https://twitter.com/...
@mollyjongfast Molly Jong-Fast on x
This would be hilarious if there weren't so many non-billionaires getting injured in the making of this drama. https://www.platformer.news/ ...
@jyarow Jay Yarow on x
This might be true. Then again, it might not. https://twitter.com/...
@mattbinder Matt Binder on x
i'm working on a piece that publishes tomorrow and in it i had to estimate how many people already subscribed to Twitter Blue using only third-party data my math came out to around 105,000 current subscribers now i see this 😃 https://twitter.com/...
@jowens510 Jeremy C. Owens on x
Reminder that with Twitter now a private company, its reporting on financial and user metrics won't be as scrutinized as it was previously (and it was already doubted, see a certain billionaire's claims about bots) ... https://twitter.com/...
@sacca @sacca on x
One of the biggest risks of wealth/power is no longer having anyone around you who can push back, give candid feedback, suggest alternatives, or just simply let you know you're wrong. A shrinking worldview combined with intellectual isolation leads to out-of-touch shit. 🧵
@sacca @sacca on x
That's the thing though. This guy is alone. He has plenty of “pals” and is the life of parties and dinners. But the hard truth is that he is straight-up alone right now and winging this. If you're trying to make sense of anything, that context might help.
@micsolana Mike Solana on x
how did this guy take 20 tweets to say he once went drinking with elon musk? a hint: if you were actually friends you wouldn't be writing a giant “please love me, i'm not like the other tech bros” thread about him for claps from kara fucking swisher. you'd just call. https://twit…
@mmasnick Mike Masnick on x
This is a good thread.... https://twitter.com/...
@broderick Ryan Broderick on x
Oh ok. Everything makes sense now. Elon Musk is a magician. https://twitter.com/...
@eghosao Eghosa Omoigui on x
Balanced thread. Chris notes it is autobiographical b/c he too was guilty of some of the failings he sugg @ElonMusk has. Very true. Twtr also made him a ton of money when he mopped up secondaries as an insider. But the issue about sycophants is a real one. https://twitter.com/...…
@vikramchandra Vikram Chandra on x
Thread on Elon, but the general principles apply to all CEOs/leaders. Move fast - but always have people around to tell you that you are wrong. https://twitter.com/...
@johnvoelcker John Voelcker on x
“Many of Twitter's core issues just can't be reduced to black and white. They are gray AF.” A thread from someone who suggests he knows Elon better than 99% of the people who weigh in on Musk matters, me included. Read it. https://twitter.com/...
@coloradotravis @coloradotravis on x
This whole thread is great. https://twitter.com/...
@jason_paladino Jason Paladino on x
This thread, from an acquaintance of Musk, is applicable to most organizations led by people who aren't receptive to criticism and surround themselves with sycophants. Seen it plenty of times in journalism. https://twitter.com/...
@martinsfp @martinsfp on x
Well worth a read. https://twitter.com/...
@dangillmor Dan Gillmor on x
Mostly good advice for the Great and Mighty Musk, which he almost certainly won't take. https://twitter.com/...
@marceloclaure Marcelo Claure on x
So true ! https://twitter.com/...
@janusrose Janus Rose on x
this unwittingly gets right to heart of why billionaires can never be moral actors. when you've gained enough wealth there is just no incentive for introspection and self-doubt, and even less incentive for other ppl to challenge you. these people will always live in echo chambers…
@karaswisher Kara Swisher on x
Sacca says it. https://twitter.com/...
@anandramesh Anand Ramesh on x
The entire thread is worth reading. There are lessons and reflections for all of us in there. This specific point is so easy to miss. To attribute success/failure/whatever to our effort alone, and miss the entirety of circumstances that allowed our effort to even matter. https://…

Chronicles