Just a few days following the announcement by Elon Musk’s X about its legal action against an advertising industry body due to an alleged service boycott, the platform has decided to eliminate advertisements from its premium subscription level. The official X profile declared on a Wednesday evening that its highest subscription package, Premium+, will now offer an “entirely” ad-free experience, raising questions regarding its impact on the earnings of creators, who benefit from X’s advertising revenue sharing initiative.
In the previous year, the entity previously recognized as Twitter, introduced its ad revenue sharing program globally for content creators. This program enabled them to earn money through ads that appear in the comments on their posts. It motivated the creators to create engaging content that spurs conversations, including memes, controversial views, and more. X specified that certain content types would be excluded from monetization, like those involving sexual content, violence, crimes, betting, substances, alcohol, and dubious financial schemes.
Despite certain limitations, the introduction of this program notably influenced X’s content display, particularly in its algorithm-powered “For You” feed, which began showcasing more viral content. Some creators reported early revenue earnings ranging from five to six figures, while others remained skeptical of X as a significant earnings platform compared to other social media platforms.
X mentioned that earnings would be shared with creators when “verified” users interact organically with ads in the comments on their posts, accessible only through the Premium or Premium+ subscriptions.
Nevertheless, the Premium+ level of X had already minimized ad exposure, making the recent no-ad announcement potentially less concerning for creators than initially anticipated. Prior to this update, subscribers of Premium+ did not encounter ads in various sections of X, despite the platform’s notification that sponsored content might still appear sporadically outside the regular ad placements.
Furthermore, X’s mid-tier Premium subscribers were already experiencing a 50% reduction in ads within the For You and Following sections.
X’s proprietor, Elon Musk, emphasized this subscription enhancement in a message, stating that subscribers’ time is valuable.
Under Musk’s watch, X has navigated a turbulent relationship with its advertisers. Musk once infamously instructed advertisers objecting to his contentious posts to “go f*** yourself,” in a live interview at the DealBook event. Following advertisers’ withdrawal, Musk filed a lawsuit, claiming the advertising boycott was unjust. Ironically, X is currently suing the Global Alliance for Responsible Media (GARM), the very organization it proudly rejoined in July, declaring its dedication to safety and its pride in being part of the GARM community.
With its heavy dependence on advertising revenue, the financial future of X is under scrutiny. However, Musk has plans to diversify X’s income sources, including transforming it into a payments platform, an update that seems imminent from recent code discoveries in the web app. This move comes as X, diverging from its Twitter origin, faces stiff competition from platforms like Meta’s Threads, open-source Mastodon, and emerging startups such as Bluesky, Spoutible, Spill, among others.
Compiled by Techarena.au.
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