Twitter’s Subscription Plan Is Backfiring In A Big Way
Twitter has only been able to get 0.2% of its active monthly users to subscribe to Twitter Blue.
When Elon Musk took over as the CEO of Twitter a short four months ago, the world was waiting to see the Tesla genius work his magic and take Twitter into the social media stratosphere. Almost immediately after Musk announced that he was purchasing Twitter, he talked extensively about instituting a subscription program that was going to be a game changer and rock the social media revenue landscape. Twitter Blue was going to be the answer to the company’s prayers, but after a failed launch in November and a successful relaunch in mid-December the performance numbers are starting to trickle in, and it is not looking pretty for Captain Elon.
Reminiscent of the brilliant poem by Ernest Lawrence Thayer Casey at the Bat. Elon comes to the plate in the bottom of the ninth with two outs, and everyone expects he will save the day and bring home the win for Mudville. Instead, the last pitch is a giant swing, and a miss, and the mighty Casey (or in this case Musk) struck out. This is the feeling in Twitterville right now after 50% of its employees were laid off amongst a myriad of other Elon public issues.
According to Engadget, the news site The Information saw a document the Twitter Blue subscriber totals, “only 180,000 people in the US have been paying for a Twitter subscription by mid-January, and that’s apparently around 0.2 percent of the website’s monthly active users.” The document also showed the figure that 62% of subscribers live in the US. We can then dust off the part of our brain that houses algebra equations and figure out that Twitter Blue has approximately 290,000 worldwide subscribers.
The cost to subscribe to Twitter Blue for a month is $8 if you pay monthly or $7 a month if you pay for 12 months upfront. It doesn’t take a math genius to tell you that would generate $27.8 million a year in revenue for the company based on those subscription figures. Of course, this is the total number of subscribers one month after the launch date. It should build up from there especially if the current subscribers feel like they are getting an excellent value at the $8 per month price point.
In a meeting, last year employees of Twitter at the time stated that Musk had said that he wants half of all the company’s revenue to come from their subscription service. Elon has also stated his revenue goal for Twitter in 2023 is $3 billion. That would mean his expectation is $1.5 billion to come from the Twitter Blue subscriptions.
Elon may want to start coming up with a plan B if that is truly his expectation because even if the company uses completely unbelievable and unrealistic sales performance improvement data to forecast the rest of the year. For example, every month Twitter will double the number of subscribers from the previous month’s subscriber total. The company revenue would still be about half a billion dollars short of reaching the goal.
If this was a foot race then Elon’s revenue expectation would be the hare and Twitter Blue’s subscriber totals would be the tortoise. The hare is so far ahead now it literally needs to take a nap for six months and then maybe just maybe the tortoise could beat it to the end-of-the-year finish line. It’s going to be an uphill climb for Elon and Twitter, but maybe he has some other tricks up his sleeve that could generate massive profits for Twitter that we are unaware of.
