X, the company formerly known as Twitter, is planning to test three tiers of its X Premium service in order to bring in additional revenue, according to Bloomberg, reporting on X CEO Linda Yaccarino’s briefing to X debt holders on Thursday. The exec told the bankers that X would split the current $7.99 Premium subscription into three different plans: Basic, Standard and Plus, at various price points. The change would potentially allow X to grow revenues despite the loss in advertising dollars that the company has faced since Elon Musk’s takeover of the platform last fall.
It’s not clear when the three-tier subscription plan would go live, but references found in the X app’s code by @aaronp613 already reference a “Premium Basic,” “Premium Standard” and “Premium Plus” plan, which have full ads, half the ads or no ads, respectively. This implies that X’s current Premium plan would essentially become the new middle tier as it currently offers subscribers the ability to remove half the ad load. Also unclear is if all payers would receive the blue Verification mark, or if that would remain more exclusive.
The FT had previously reported Yaccarino was planning to meet with the seven banks that had helped to finance Elon Musk’s takeover of the social network — an acquisition that’s now under SEC investigation, as Musk allegedly violated securities laws by scooping up Twitter shares ahead of the acquisition.
In the time since his takeover, his controversial changes have spooked advertisers, as major brands pulled their ads after seeing their posts appear beside hate speech and pro-Nazi content. Reuters this week reported that X’s U.S. ad revenue has declined every month since Musk’s acquisition, with the latest figures showing a 60% year-over-year decline as of August.
In June, Yaccarino joined X (then Twitter) from NBCUniversal where she served as chairman of its advertising and partnerships group, with the goal of getting X’s ads business back on track. Those efforts are still underway, as Bloomberg’s report notes she also told the bankers that advertisers were returning to X, but with smaller budgets than before. She additionally noted the company would be cash-flow positive if not for the debt owed — a figure that’s now $13 billion. Bloomberg estimated that X also owes around $1.2 billion in interest payments on that debt per year.
It’s not clear if the three-tier approach to subscriptions Yaccarino spoke of would include the plan Musk recently introduced when he said that X would be moving to a model where everyone would need to pay a small fee for use of the platform. The X owner explained that charging everyone on the service was the only way to combat the “vast army of bots” X faces. In fact, Yaccarino seemed caught off guard by a question about that plan at the Code Conference last week, when asked how many users X might lose with such a change. Confused, the CEO asked the interviewer to repeat the question and then responded by asking if Musk had actually said that X was doing that, or was he “just thinking about it?”
The odd answer raised questions about how much Yaccarino was in charge of X’s business goals and objectives, while others showcased she didn’t have a solid grip on X’s numbers. For example, at one point during the interview, she said X had “200 to 250 [million]” daily active users, “something like that.” (X clarified to The Information after the fact that X had 245 million.) The two execs often seemed to not be in alignment on their figures, as Musk spoke of X’s 100-200 million posts per day just weeks ago, with Yaccarino this week saying the figure was 500 million. As it turns out, Yaccarino was referring to a combination of original posts, replies, quote posts and reposts while Musk was only referencing original posts.