What Does Elon Musk’s Acquisition of Twitter Mean for its Future as a Business?

What Does Elon Musk’s Acquisition of Twitter Mean for its Future as a Business?

Elon Musk completed his formal acquisition of Twitter on 27 October. The world’s richest man began buying the social platform on 14 April. Reaction to his takeover hasn’t always been positive, however. Twitter’s shares have experienced dips, and public figures have expressed dislike of Musk and the direction he could take the social media platform. Even so, the fact remains that Musk now owns Twitter. So what does this mean for Twitter as a business?

A New Revenue Stream

Musk vowed to introduce some changes to Twitter, and so far, he’s stayed true to his word. Perhaps the most prominent of these is introducing an optional paid subscription service. Previously, Twitter was free for everyone, and you could access and use all its features. Some key features are now only available to those who join the monthly $7.99 paid subscription service.

One of these exclusive features is the Blue Tick. The Blue Tick confirms an account of public interest – for example, one belonging to a celebrity or well-known brand – is authentic. If you type in your favorite celebrity’s name, many accounts could come up. Whichever has a Blue Tick is the actual account – all the others are third-party, fake accounts.

Subscribers gain access to a few other features besides the Blue Tick. These include the ability to undo Tweets and customize the navigation bar; subscribers also have prioritized customer support. Musk has publicly defended the locking of some features behind a paywall

Two Tiers of Users

Before Musk came along, Twitter was relying on money generated from adverts. Musk has said that creating a new revenue stream is a necessary move going forward. It makes sense for a business, like Twitter to monetize at least some of the features it offers. If the platform just kept relying on ads, it would be less likely to have a healthy future. It’s common practice for a company to have two or more tiers of users or customers. For example, the casino industry is famous for having “platinum” or “black card” memberships for its biggest spenders. If you’re a dedicated player, you may receive an invitation. Once a member, you’ll enjoy exclusive promotions, rewards, and perks that aren’t available to non-VIPs. However, you don’t always have to be a VIP member to access great rewards. The best online casinos offer bonuses and rewards to all their customers, including a 100% bonus of up to £300, plus 150 free spins. One big difference between the industries is that you don’t technically pay to become a VIP. However, most times, you have to keep spending certain amounts to retain membership.

Unlike casino sites, Twitter doesn’t directly earn money from its users. Therefore, if Musk wants a new revenue stream, charging a fee for access to select features makes perfect sense.

What Are Twitter’s Long-Term Prospects as a Business?

Twitter is one of the world’s leading social media platforms. It’s enjoyed significant success in the past, but Musk is actively trying to safeguard its future. While he undoubtedly wants user numbers to grow, he wants revenue to grow too. 

The current downturn in digital advertising revenue is affecting Twitter’s revenue. The decline in digital adverts is why Musk has been so keen to introduce a new way for Twitter to make money. 

The new monthly subscription charge could increase if the company continues to take less money from advertising. Musk initially confirmed a fee of $20, though the next time he mentioned it, he said it was just $7.99. There could even be multiple tiers of subscriptions where the more expensive options grant access to more features. 

There’s been some negative publicity regarding Musk’s takeover and changes. Despite this, there’s every chance that Twitter will continue thriving. The social media platform is still completely free to access; it’s just that certain features are now for paying subscribers only. There’s still a lot of monetisation that can be done. Musk could generate much more money from Twitter users if he handles things correctly.

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