A recent report revealed that just 0.2% of Twitter users have opted into the platform.
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According to data obtained by The Information, as of mid-January, about 180,000 people in the U.S. and an additional 110,000 worldwide had signed up for Twitter Blue. That means the company earns about $28 million each year in subscription revenue.
Twitter Blue is a subscription service that offers users exclusive features for a monthly fee. These features include an Undo Tweet button that allows users to recall tweets within 30 seconds of posting, as well as access to customizable color schemes, curated collections of interesting and timely content, and more.
In October, Elon Musk acquired Twitter for a whopping $44 billion and discovered that the platform was suffering daily losses of over $4 million, forcing him to look for new sources of revenue.
In December, Twitter Blue was launched to the public as a monthly subscription service. It costs $8 per month for web users, while Android and iOS subscribers pay an additional $11 due to Apple and Google.
In his opening message to Twitter employees after taking control, Mr. Musk said he wanted about half of the company's revenue to come from paid subscriptions in order to stay afloat during the looming economic crisis.
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Last year, Twitter's revenue model relied heavily on advertising campaigns from well-known brands. Unfortunately, many of those companies pulled ads at the end of the year.
Despite Twitter's best efforts to accommodate the activists' demands, advertisers were encouraged by activist groups to pull their money, resulting in a significant drop in revenue. Companies like Audi, General Motors, and Volkswagen — all of which are Tesla — halted their campaigns.
According to Mr. Musk’s calculations, Twitter would need about 15 million monthly paid users to be profitable. However, current numbers show that it is just 0.2% of the way to achieving that goal – a worryingly low percentage.
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In an effort to cut costs, Mr. Musk significantly reduced the size of Twitter’s workforce. Unfortunately, up to 50% of the employees were laid off late last year, due to estimated annual losses of $1 billion. Left with no choice but to lay them off, Mr. Musk explained that “unfortunately there is no other choice.”
