Musk's Big Plans for Twitter: Subscriptions, Staff Cuts, Less Advertising

You don’t get to be one of the richest men in the world without dreaming big, and Elon Musk will never be accused of harboring small dreams.

The man who created the first private company to send humans into space (with a lot of help from the American taxpayer) has big plans for his newest acquisition, Twitter. They include increasing Twitter’s revenue from $5 billion today to $28 billion by 2028.

At the same time, he’s going to cut advertising by 50%. That may sound counterintuitive until you hear that Musk is going to slash employees from the company and charge a nominal subscription fee to use the site.

New York Times:

Under Mr. Musk, advertising would fall to 45 percent of total revenue, down from around 90 percent in 2020. In 2028, advertising would generate $12 billion in revenue and subscriptions nearly $10 billion, according to the document. Other revenue would come from businesses such as data licensing.

Twitter would bring in $15 million from a payments business in 2023, according to the document, which would grow to about $1.3 billion by 2028. The company’s payments business today, which includes tipping and shopping, is negligible. There has been speculation that Mr. Musk may introduce payment abilities to Twitter given that he helped popularize PayPal, the digital payments service.

Related: Will Elon Musk Move Twitter Headquarters Out of California?

Currently, Twitter Blue is available for $2.99 as a monthly subscription. But Blue has been slow to generate subscriptions, so Musk is going to have to find a way to make it worthwhile.

Forrester research director Mike Proulx thinks that “Users simply aren’t getting material value for a $2.99 monthly subscription fee. So, whether Elon Musk can kickstart Twitter’s subscription service or not will depend on offering substantially more value to justify a premium price point.”

Mr. Musk anticipates Twitter’s total number of users will grow from 217 million at the end of last year to nearly 600 million in 2025 and 931 million six years from now. Most of that growth will come from Twitter’s ad-supported business, including Twitter Blue, for which users pay $3 a month to customize their experience on the app. According to the pitch deck, Mr. Musk expects 69 million users of Twitter Blue by 2025 and 159 million in 2028.

Musks’ purchase of Twitter may be the biggest mistake of his career. Even geniuses are vouchsafed one spectacular failure in their lifetime and for Musk, sending a human being into space is easy compared to riding the whirlwind that is Twitter.

Those who tweet belong to a very specific and limited group of people. Expecting 900 million people worldwide to sign onto a platform with such limited use could ultimately force Musk to reconsider how consequential Twitter truly is.