Will Customers Subscribe To A Tiered Social Media Service?

X might soon adopt a subscription-based model similar to a tiered service of streaming videos (Photo by Harun … [+]Ozalp/Anadolu Agency (Getty Images).

Anadolu Agency by Getty Images

Subscribers will soon be able to choose to pay more for fewer ads on the platform that was formerly Twitter. Bloomberg initially reported that Elon Musk’s X is looking at a tiered model where the Basic tier shows the same number of advertisements, Standard tier half, and Plus level no ads.

At the moment, users of the premium tier see half the amount of ads that the free tier does.

A price plan for the three paid tiers isn’t known—nor is whether there would even be a free option for users. Musk said last month, however, that all users will be charged a monthly subscription. He claimed this would rid the service of bots.

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It might seem Musk is more concerned about making the service—which he paid $44 billion to acquire last year—profitable.

Twitter finds it difficult to impose fee models that are used in other industries. It is also at risk of losing its users and brands’ trust. C4 Trends’ technology and social media expert Susan Schreiner said that it seems to be a revenue grab.

The situation at X/Twitter can be difficult to understand. Charles King, Pund-IT’s principal analyst, said that as a privately owned company, it is reasonable for the company to keep their financial/strategic information close at hand.

King pointed out that it could obscure, or dilute the message to the public about its achievements. Musk seems to have made a new pivot with the tiered system, but it is also the latest in X’s strategy.

X underwent a few changes including the elimination of its legacy “verification’ system. Just this month, the headlines of shared news articles were removed. The tiered subscription model may not win favor with users—especially with those who haven’t signed up for the premium option.

King said that it is difficult to know how the users’ response will be. The competing platforms which have emerged in the last few months, since Musk has purchased Twitter and rebranded it, have not really taken off. It is difficult to convince people who are used to freemium platforms to pay for paid services. “If X/Twitter decides to go with a paid subscription, this could encourage a significant number of users who use Twitter and other services to start using alternative platforms.”

Take a cue from the Streaming Model

It’s important to note that a tiered system is not exactly a novel concept. Many streaming services already use it, including Peacock. It’s not clear whether it will work well with social media.

This is similar to a streaming-model, but with less ads depending on the payment level. Cost will play a major role. “The higher prices are, the more casual customers they will lose,” said Greg Sterling, cofounder of Near Media. They might also see gains from professional users, who feel obliged to remain on the platform. The future remains uncertain. Twitter/X has changed. It is not the same public space it used to be.

A tiered approach will reduce the reach of advertisers.

King added, “Clearly Musk is looking to better monetize the platform and a subscription-based model could bring in much needed funds while Linda Yaccarino works to restore or rebuild relationships with advertisers.”

Twitter/X had some modest success in bringing back their top advertisers but the overall ad revenues remain way down. Sterling added that the plan was designed to make up for these losses. This plan is unlikely to bring Twitter/X back on track financially, especially given the state of Twitter/X.