Regardless of X Premium (previously Twitter Blue) failing to catch on the best way that Elon Musk had hoped, the platform’s eager to search out new methods to spice up its income consumption, because it appears to combine extra AI components, which come at a major value, whereas additionally offsetting its advert income losses.
Alongside that line, simply earlier than Christmas, X introduced that the value of its X Premium+ subscription tier, the costliest X subscription choice, can be growing by 30%, as a way to fund the continuing growth of its choices.
As per X:
“We’re updating the X Premium+ subscription worth on December 21, 2024. New subscribers can pay the up to date worth beginning that day. In case you’re an current subscriber and your subsequent billing cycle begins earlier than January 20, 2025, you’ll be charged at your present charge; in any other case, the brand new charge will start together with your first billing cycle after that date.”
The brand new worth provides a further $6 per thirty days to the X Premium+ worth, rising from $16 to $22 per thirty days, or $229 yearly.
X says that the upper worth level will allow it to supply a totally ad-free expertise for its prime paying customers, whereas additionally enabling larger utilization limits for its Grok AI fashions.
It’ll additionally give X extra capability to pay creators through its up to date income share mannequin:
“We’ve shifted our income share mannequin to reward content material high quality and engagement fairly than advert views alone. Your Premium+ subscription price contributes to this new, extra equitable system the place creator earnings are tied to the general worth they convey to X, not impressions of advertisements.”
X introduced this alteration again in October, with this system shifting from offering creators with a reduce of advert income for the advertisements displayed of their publish replies (and seen by X Premium subscribing customers), to paying creators based mostly on engagement from paying customers.
The added value of X Premium+ will now contribute to this, by giving X a little bit further revenue to share, whereas additionally, as famous, funding its ongoing AI growth.
Although, technically, that’s carried out through xAI, which is a separate firm to X itself. xAI, which is in command of the fashions and programs that energy its Grok AI chatbot, simply closed a Collection C funding spherical of $6 billion, including to the $6 billion that it additionally raised again in Might, enabling it to develop its operations.
xAI has used nearly all of that funding to construct its “Colossus” AI information heart in Memphis, which contains 100,000 Nvidia H100 GPUs into the xAI operation. That places it on par with the AI programs at present being operated by Meta and Google, although each of them have considerably extra capability, and functionality, to develop additional at this stage.
However for now at the least, the brand new AI computing cluster has propelled xAI right into a place of legit competitors on AI growth, because it appears to realize a foothold within the house, and money in on the anticipated AI growth within the years forward.
How a rise in X Premium+ pricing would possibly instantly contribute to this isn’t clear, however X has continued to pump out new updates for its Grok chatbot (the most recent being improved picture era), whereas it’s additionally launched a standalone Grok app in some areas.
And it’s utilizing X to advertise this:
So there’s an intertwining there, although the place the traces are drawn between the 2 just isn’t clear, so it’s inconceivable to say how every contributes to the opposite on this respect.
Regardless, that’s one place that X says the additional subscription consumption can be going. Although as famous, the value enhance may be an try and cowl up for the shortfall in X Premium subscribers, which has left one other gap in X’s income projections.
In accordance with evaluation carried out by TechCrunch and AppFigures again in October, X Premium at present has round 1.3 million subscribers in complete, which contains all tiers of the providing. Of that, solely a fraction can be paying for X Premium+, and as such, a worth enhance of $6 on this class isn’t going to be a significant needle-shifter on this respect.
However those that are paying for the highest tier are additionally much less prone to cancel, so perhaps, X is simply cashing in the place it may. But, the possibilities of X Premium ever changing into a significant income driver, as Elon Musk had initially projected, appear to be not possible at this stage.
In his authentic enterprise technique plan for Twitter, which he shared with potential traders shortly after he took over on the app (and earlier than the “X” re-brand), Musk predicted that Twitter Blue (now X Premium) would attain 69 million paying subscribers by 2025, and 159 million by 2028.
It’s an extended, good distance off that, and out of doors of worth will increase like this, it’s arduous to see how X will have the ability to generate any actual income traction from its subscription choices.
Until it comes out with some mind-blowing add-ons to sweeten the deal. I’m undecided what they may even be, nevertheless it appears possible that AI will play an element one way or the other.
Personally, I preserve that social platforms are over-valuing the utility of options like AI picture creation to common customers. However perhaps Elon and Co. have one thing else up their collective sleeves.
