X is testing three different paid membership tiers, report
Move comes after decline in ad revenue and active users
X, formerly known as Twitter, is reportedly considering splitting its premium subscription service into three membership tiers as a strategic move to address its financial challenges.
As reported by Bloomberg, the company is currently testing Basic, Standard and Plus versions; it is unclear whether a free version of the service will still be available.
The current premium plan starts at $8 per month.
While specific details are limited, Bloomberg's source, who attended a call with X and creditors who assisted Elon Musk to acquire the platform, said that it appears that these paid subscription options will impact the number of ads that users see while using the platform.
Basic users are expected to continue seeing the usual number of ads, whether labelled as ads or not. Standard users, on the other hand, are likely to see only half as many ads as Basic users.
The highest tier, Plus, is expected to eliminate ads entirely, and would come with a higher price tag.
X has not disclosed specific timelines for the introduction of these new membership tiers, whether for testing or general availability. Additionally, details about potential additional benefits associated with each plan, such as blue check verification or editing capabilities, remain undisclosed at this time.
Regarding the company's financial situation, Bloomberg reported that CEO Linda Yaccarino has conveyed to bank lenders that advertisers are gradually returning to the platform, albeit with scaled-down advertising budgets.
However, Reuters recently reported a substantial decline in monthly ad revenue at X, with year-over-year decreases of at least 55% recorded each month since billionaire Elon Musk's acquisition of the company in October 2022.
The sharpest drop occurred in December 2022, with US ad revenue plummeting by 78% compared to the same month in the previous year.
These figures were sourced from ad analytics firm Guideline, which monitors advertising spending data from major ad agencies.
In August 2023, X's ad revenue experienced a 60% year-over-year decline.
X has encountered difficulties in retaining certain advertisers following its acquisition by Elon Musk, with some brands expressing caution about the rapid changes occurring under Musk's ownership.
Regular users are apparently down too. In an interview with CNBC last week, Yaccarino said the company currently has 225 million daily active users, which would represent an 11% decline since Musk took over.
Musk himself has acknowledged that the platform's revenue has suffered, and he has attributed this decline to pressure from activists. In a recent statement, he specifically blamed the Anti-Defamation League (ADL) as a primary cause behind a 60% decline in US ad revenue, although he did not specify the time frame for this decline.
Musk refused to comply with subpoena
Last week, the US Securities and Exchange Commission (SEC) initiated legal action against Elon Musk, seeking to compel him to testify regarding his acquisition of Twitter.
Attorneys representing the SEC said in a legal filing, made public in the Northern District of California, that Musk did not comply with a subpoena requiring him to appear for testimony on 15 September 2023.
According to the attorneys, the subpoena was served to Musk in May 2023.
"Musk's ongoing refusal to comply with the SEC's administrative subpoena is hindering and delaying the SEC staff's investigation to determine whether violations of the federal securities laws have occurred," the attorneys wrote.
"Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony."
The SEC said it made efforts to schedule a meeting with Musk, attempting to find a mutually convenient time and location. These efforts included an offer to meet Musk at the SEC's office in Fort Worth, Texas, the nearest SEC office to Musk's current residence in the Austin area.
The SEC proposed multiple dates for this meeting, with options in both October and November of the current year.
"These good faith efforts were met with Musk's blanket refusal to appear for testimony," the suit says.
A hearing regarding the SEC's request to compel Musk to appear for investigative testimony is scheduled to take place on 9th November, as per the legal filing.