X, the social media platform formerly known as Twitter, is testing three tiers of premium service for users, according to a Bloomberg report. The company, which was acquired by Elon Musk in October 2022, is trying to boost its revenue and profitability amid a decline in advertising and a heavy debt load.
Basic, Standard and Plus Tiers
The report, which cited a person who attended a briefing call with X’s debt holders on Thursday, said that the company is planning to trial three different premium tiers — Basic, Standard and Plus. Each tier would be priced based on the number of ads shown to customers. The premium plan for X currently costs eight dollars a month, per the platform’s website.
Subscribers can get a blue checkmark for their X account and have early access to new features, such as the ability to edit their posts. The three-tiered plan would allow the company to attract more customers who may not want to pay the full price for the premium service.
Advertisers Are Back, But Spending Less
X also said that while advertisers are returning to the platform, they are bringing smaller budgets than before. The company’s CEO Linda Yaccarino, who joined in June 2023, gave a generally upbeat view of the company’s financial situation during the briefing. She said that revenue is growing in the high single digits quarter-over-quarter across advertising, data licensing and subscriptions.
She also said that the company is already cash flow positive, excluding the cost of servicing debt, and that it should reach that milestone even when including debt by the second half of 2024. The company owes about $1.2 billion in interest payments per year on its $13 billion debt, Bloomberg estimated.
Musk’s Vision for X
Musk has been vocal about turning X into an “everything app” that could generate revenue from features like shopping and payments. He has also floated the idea of charging everyone who uses X a small fee, a move he said would help weed out bots. The billionaire has introduced a flurry of changes to the platform since he bought it, including changing its name and logo, loosening its content-safety rules and laying off more than 75% of its staff.
Musk’s takeover of Twitter was met with skepticism and criticism from some users, investors and regulators. Some banks tried to offload the debt for just 60 cents on the dollar after the deal. Earlier this year, the company’s value had dropped to just a third of its purchase price, according to Fidelity.