A Look at the Currently Proposed Options…
So after week two of the Elon Musk Twitter drama, we’re left in a state of limbo, as we await the final favors for the deal, which will finally make Musk the head chief at a private Twitter, which may or may not run advertisements currently, may or may not allow all types of supremacist, homophobic and invective speech, and may or may not be capable to, one day, actually make money, despite these changes.
And we’ve little to go on right now as to how it’ll affect the company and the platform as we endure it. What we do have is that Twitter workers are progressively nervous about their jobs, and the business that they may end up working for under Musk, while we’ve also had some slight hints as to how Musk plans to change the app.
To be crystal, Twitter isn’t a charity, and after spending$ 44 billion on the app, Elon Musk will be appearing for tricks to maximize Twitter’s earnings input, and get back at least some of that cost. In a recent interview, Musk said that doesn’t watch the economics of the deal at each, and that his driving assignment is to run“ a public platform that’s maximally trusted and astronomically inclusive”.
But with huge debt, and collecting interest, Musk has to make moneybags too, and the bull case for the accession is that Musk, being the forecaster that he is, sees entity that others don’t, and can clear a pathway to optimal success for the platform- even though maximum demand judges see no feasible pathway to rotating any expressive profit from the app.
So how will Musk do it?
then are the fields that Musk is reportedly appearing in right now – and to be crystal clear, Musk has approached these offers without inner knowledge of the company and its current makeup.
Accelerating subscriptions – Musk is reportedly appearing to make Twitter Blue into a registry layer, of feathers, with users paying a yearly charge to learn a verification tick that confirms that they’re a genuine, authentic person. That could more allow Twitter to attack bots (as it would make running bot estates bring prohibitive), while it would similarly assure a place of clarity in the app because you would endure, grounded on these new forms of authentication markers, that you’re interacting with a real person, who’s enrolled their contact and payment details in the app. The economics could be delicate – if Musk were to ask$ 1 per month for this, that would bring by$ 229m per month/$2.7 b per annum, if the current number of live users stick about, and aren’t all bots. You’d have to accept that quite a few won’t close up paying, which brings this down a lot and would reduce Twitter’s earnings input significantly if this were the only way Twitter could make money in the future. For reference, Twitter made$5.08 b in earnings in 2021.
Taking Twitter private – Of course, some of that earnings strain is decreased if Twitter goes private, as it would no longer be indebted to shareholders who await to see earnings rise by a defined, respectable quantum. Musk’s prospect is that Twitter needs to go private to assure that it can make opinions free from the strain of exterior forces, allowing it to even come to a platform of free speech. The challenge with that, of course, is that advertisers will be less cozy placing advertisements alongside potentially exceptionable content – but that then leads into the coming stage of Musk’s grand Twitter plan.
No more advertisements – This would obviously be the biggest impact from a social media marketing perspective – Musk has said that Twitter should no longer run advertisements at all to remain truly independent. That also means that Twitter would need to calculate alternate sources of income, and with advertisements making up 98 of the company’s profit, that’s a big hole to fill. Part of Musk’s thinking then may also be that Twitter can cut costs by also removing all of the staff that works on its announcement rudiments, which would be a major cost saving-but indeed so, if Musk wants to get close to making Twitter profitable, when factoring in its operating charges versus income, it’ll be a big space to make up. It’s delicate to see how this would be possible, but perhaps, Musk knows commodities that we don’t.
Charging for tweet embeds – This seems like a bit further of a stretch, but Musk has also reportedly floated the idea of charging websites for embeds of tweets from vindicated druggies, with the plutocrat potentially going back to the druggies themselves. That would align with Musk’s drive to get further high profile druggies twittering more frequently – perhaps, if they can make many bucks from twittering, that could act as a motivator to get them participating further in the app, which could spark further engagement with their suckers, and induce further in-app exertion overall. Of course, the counter is that people could just screenshot tweets rather, however, there are ways that Musk could make tweets brand defended, which would be indeed easier if he were to take this coming step.
Make Twitter‘ Pay to play for druggies – This is a more radical move-and to be clear, Musk himself has not proposed this idea, as similar, just yet. But aligning with the conception of charging druggies for a vindicated stoner crack ( different from the current blue crack for high profile druggies), Musk could look to make all druggies pay, or they simply wouldn’t be suitable to use the app. Your first instinct to this is that no bone will pay, right? People can just use Facebook or Instagram or Snapchat rather- so why would anyone pay to simply log on and read tweets? I allowed that too, but upon further reflection, I do suppose that Twitter is a critical platform for numerous intelligencers, political and other media types that use tweets to stay up with the rearmost news. That’s why Twitter is so influential, despite having only a tenth of the active druggies that Facebook does – while its followership may be lower, the people that do use Twitter are generally among the most active in their separate diligence, and following the rearmost tweets enables them to lead trends,re-distribute the rearmost news to their cult off-platform, remain in-the-know, etc. As similar, I suspect that numerous of them would pay, and if Musk were to lock tweets down, that would mean that they’re no longer intimately accessible, making it much easier to apply charges for tweet embeds, as well as any other play of on-platform content.
Cost- slice – The other crucial area that Musk is exploring is cost- slice, which again aligns with the below points, in that Twitter could cut costs significantly if it no longer ran advertisements. Twitter spent$1.7 blast time on deals and marketing and general admin costs, while it also spent a fresh$1.2 b on exploration and development, and$ 2b on the structure. Without advertisements, those costs could come down a lot, and if Musk can reduce those outgoings in a big way, he could, theoretically, make enough plutocrat from his subscription proffers to induce positive cash inflow for the app over time, while also enabling it to remain independent, and thus better suitable to run with a‘ free speech’ approach.
Again, Musk has made these pitches in meetings to secure backing for his Twitter shot, and without internal sapience into how the company is presently run, and what’s truly possible within the current structure, or within any unborn-shaping of the business.
But it does feel like this is where Musk is likely to make his big changes, especially given that Twitter doesn’t have a lot of other paths to take, grounded on literal performance.
But there may be fresh openings that we’re not seeing, and the general view is that Twitter has underperformed over time, with indeed current CEO Parag Agrawal noting in an each-hands meeting this week that “ I could have done effects else. I suppose about this a lot. I feel responsible for the conduct I’ve taken over the last decade. I’ve only been in this job for four months, but I’ve been at the company for a decade. And yes, we could have done better. Should have done better.”
Perhaps, now is the time that Twitter can make those big changes, with further freedom as an independent company-and again, numerous have refocused on Musk’s genius in other fields, so perhaps he does indeed see commodities that others don’t then.
What we know for sure is that this will be the most public demonstration of that genius that Musk has ever had, and if he truly is the visionary that numerous believe, he’ll surely have a chance to prove it.