X is undertaking a significant transformation of its creator revenue-sharing scheme, shifting from a revenue-share of ads to the sharing of Premium user payments as the pool of money for the payouts to the creators in the platform.

According to X:
"Creators! We're excited to introduce our biggest Creator Revenue Sharing update yet.". Payouts are increasing, and now you'll be paid out based on engagement with your content from premium users-not based on ads in replies. No more will ads in reply determine your payout. Your payout will be based on engagement with your content from premium users. So if people are following you and subscribing to X Premium and engaging with your stuff, they're supporting you directly. And, because X Premium is growing, so are your earnings. The more Premium subscriptions overall, the more money you make.

So again, instead of balancing creator earnings against the number of ads served in comment replies, where ad revenue could be earned only by those ads that were visible to Premium members, for now, X is shifting toward sharing a cut of the Premium user subscription payment.

Explaining the new process, X explains that up to 25% of Premium subscription payments now go directly to the creators, meaning users would pay back their favorite creators by engaging with them. The company will analyze how engagement occurs, but for a user to qualify for payment, says X, "only genuine interactions from Premium users.".

"Additionally, engagement from users on higher Premium tiers are also worth more. We also consider the characteristics of your audience, including who they are and who follows them."
 
Therefore, basically, X will pay the creator rewards for earning more organic engagement while at the same time penalizing the creators who are trying to aid others by leaving a comment to boost their own payouts.

It makes sense in some ways, and as X sheds advertisers, it will likely be more than enough to ensure that creator payouts don't drop further, a situation many have encountered. But it also means that X's creator payout program is effectively morphing into a pyramid scheme in that if you want bigger payouts, you'll need to induce your audience to sign up to Premium to support you. And then they can also earn their own payouts by encouraging followers to sign up too, etc.
How is this going to impact the amount of revenue X will share with creators?

Well, that depends on how many signed up for X Premium. The reports say less than a million are under the program, but newer additions like Grok AI, its chatbot, may have affected that and, therefore, expanded the base of revenues that X can tap for this offering.
So let's assume X now has 2 million X Premium users and all of them pay an average of $8 a month. X claims that 25% will be directed to creators, which would imply that X could potentially have around $4 million available per month to afford these new payouts.

That's not nearly as much money as it's been shelling out to creators over time. According to reported payout stats by X, it has been splitting about $5 million per month in total with creators through this program.

It doesn't seem like they do, but if X's ad revenue is dropping and Premium sign-ons are increasing, maybe they are farther along than envisioned in terms of meeting in the middle, close enough that X's newfound motivation is to encourage as many sign-ons to Premium.

I don't know if it's more sustainable, what with X's more all-encompassing ad business woes, but if X can find a way to get the users to pay creators essentially, that may be a better driver for its business.

The overall incentives don't shift the dale, since creators were already nudged to elicit as many responses as possible under the old scheme, it's just that the payouts will only reduce the pressure on X to continue showing ads in replies.

Either way, X clearly feels that this is a better way forward and maybe, if it can encourage more Premium sign-ups, it'll help the app distance itself from reliance on ad partners.

We shall find out. X announced that the new scheme will come into effect from November 8th.