Elon Musk's vision to shift X away from reliance on advertising revenue through increased paid subscriptions is proving challenging. A recent analysis by app intelligence firm Appfigures reveals that since the rebranding from Twitter to X in 2021, the platform has generated around $200 million in in-app purchase revenue across iOS and Android from its X Premium subscription service. However, this figure only accounts for purchases made through mobile apps, leaving out contributions from mobile and desktop web transactions, which could elevate the total substantially—especially since X incentivizes web purchases with discounts.
After accounting for app store commissions, X's earnings are estimated to be at least $140 million. This estimate could rise further, as Apple and Google lower their commission rates from 30% to 15% in the second year of subscriptions. Nonetheless, Appfigures acknowledges the difficulty in determining how many subscriptions fall under each commission rate.
Originally launched in 2021, Twitter Blue—now X Premium—was relaunched in December 2022 as part of Musk's strategy to diversify revenue streams beyond advertising. Initial reception was lukewarm, generating only $11 million in mobile app subscriptions within the first three months. A year later, X introduced additional tiers: Basic and Premium+.
Currently, X offers three subscription levels: Basic, Premium, and Premium Plus, each providing varying access to advanced features like Grok AI, the blue Verified checkmark, and fewer ads. The X Premium tier, priced at $11 per month on mobile, is the highest in-app purchase based on App Store data. In September 2024, X generated $14.7 million through mobile in-app purchases, which translates to approximately 1.3 million subscribers if the majority opted for the Premium tier.
If we consider an alternative scenario where all subscriptions were for the Basic tier at $4 per month, X could claim up to 3.7 million paid users. Estimating a breakdown of paid users, one might expect around 940,000 Premium users, 134,000 Premium Plus users, and 368,000 Basic users, bringing the total to about 1.4 million subscribers for September.
Despite some positive trends, such as a 30% quarter-over-quarter revenue growth from Q2 to Q3, the overall picture remains mixed. Furthermore, additional in-app purchases from popular creators on the platform contribute to the revenue picture, although they still pale in comparison to X’s total earnings. For instance, Elon Musk, who has a staggering 200 million followers, may be drawing around $200,000 monthly from subscriptions, assuming similar engagement rates as before.
Recent shifts in X's revenue strategy have included a new program where creators are compensated based on the engagement they receive from Premium subscribers, rather than ad revenue. This change aims to bolster subscriber numbers and enhance creator monetization opportunities. However, it raises questions about the potential for clickbait content as creators strive to maximize their earnings.
Despite these changes, X's subscription revenue represents only a small fraction of the overall $1.48 billion generated in the first half of 2024, as outlined in regulatory documents. The platform's journey toward sustainable growth remains a balancing act, especially as it seeks to win back advertisers after recent controversies.
As X continues to navigate these challenges, the upcoming months will be critical in determining whether its subscription model can truly take flight or if it will remain an underwhelming component of its broader revenue strategy.
