Elon Musk’s X, formerly known as Twitter, is testing a three-tiered premium service aimed at reinvigorating growth. The company disclosed this strategy during a briefing to debt holders on Thursday, according to a person who dialed into the call, reports Bloomberg.
The current X Premium (formerly known as Twitter Blue) plan, priced at $7.99 USD per month, will be divided into Basic, Standard, and Plus categories.
CEO Linda Yaccarino, who joined the company in June, reported that revenue is growing in the high single digits quarter-over-quarter across advertising, data licensing, and subscriptions. Excluding the cost of servicing debt, the company is already cash flow positive, Yaccarino said. She also projected that the company would reach cash flow positivity, including debt, by the second half of 2024.
The three-tiered premium service aims to attract consumers who may be hesitant to pay the full premium price. Musk has also suggested the possibility of charging all users a small fee to help eliminate bots from the platform.
The company faces challenges in regaining advertiser trust. Although 90% of the top 100 advertisers have returned, up from 75% in June, they are operating with smaller budgets, Yaccarino noted. X owes approximately $1.2 billion in annual interest payments on its $13 billion debt, acquired during Musk’s $44 billion takeover.
Since the acquisition in October 2022, the company has laid off more than 75% of its staff, discontinued services, and launched a premium subscription. Musk has expressed intentions to transform X into an “everything app” capable of generating revenue through various features, including shopping and payments.
Hints of the new three-tiered service were first discovered in the code within the X app by @Aaronp613. The code suggests that the Basic plan will include the standard number of ads, the Standard plan will show half as many, and the Plus plan will be ad-free, at the most expensive plan.
Would you subscribe to X Premium at a lower price point?
