X appears to be close to rolling out its new pricing tiers for X Premium, which includes an ad-free subscription option, and the facts now point to three variants of the X Premium package in the back-end code of the app.
the updated X codebase now references:
X Premium Basic – The users in this lower tier will see full ads in their feed
X Premium Standard – This seems like the newest version of Premium, with half ad exposure
X Premium Plus – As noted, these users, on a pricier package, would have no ads in-stream
In short, X wants to make its subscription product more interesting by pricing it down, making it cheaper for users to get a blue checkmark, even though they will not benefit like the existing version of $8/month. Yet it is not known whether they will get the checkmark in the first place, as the cheap, stripped-down version of X Premium supposedly will still carry the marker of paid verification.
Perhaps the most excitement and debate will be for the ad-free tier, however.
Meta, TikTok, and X are reportedly working on ad-free subscription services as a way to get more users to subscribe to their products, and the underlying driver might not be new revenue opportunities, per se, but something to do with changes in the approach toward privacy in Europe.
According to The Washington Post, this move toward paid, ad-free access might actually be in line with the EU rules on data collection, which essentially demand that social apps offer an option for users to opt out of data tracking for personalization, if they wish to do so. Offering a paid option that could potentially allow each company to continue using data tracking tools; that's because users would technically then have some way of opting out. But instead of the way that Apple iOS 14 is set to proceed, whereby users can block app tracking freely, it would be the companies that wanted you to pay for that privilege.
That would then only guarantee them to continue to get money in the pockets, while also keeping up with changing laws. In this scenario, actual take-up of subscriptions themselves would be less focused on, and rather more on the platforms holding on to those precious data insights.
Which might also be the impetus in X's, though X is also looking to enhance subscription take-up, as part of its overall development plan.
New pricing tiers are on the way for X Premium, owner Elon Musk said last month, as it looks to pique greater interest in its subscription package, with Musk also signaling that it will push more users to the wallet to access the app in an attempt to mitigate the proliferation of bots and AI-generated spam.
Although for clarity, Musk didn't specifically say that X would be looking to charge all users for access.
What Elon said was:
"The single most important reason that we're moving to having a small monthly payment for use of the X system is that it's the only way I can think of to combat vast armies of bots."
For that to be true, Musk needs most users to start paying up, which would suggest that he's probably factored in making everyone pay, or X is going to try and incentivize more take-up with enhanced subscription offerings, though it's going to have its work cut out for it, with only 0.43% of X's users currently paying for that checkmark in the app.
Pricing, as well as the revenue implications that eventually accompany it, may also be challenging.
Since it already generates $US12 per user, per month just on ad exposure-only, it would need to at least be priced that high, and probably higher, to completely rid itself of the need for ads. That calculation would change depending on how many users sign up; its overall ad exposure numbers will shift, probably dramatically, and with that, probably significantly alter its models.
It may also have some further implications for creators who are participating in X's ad revenue share program. Creators already get a share of ads served in replies on their posts; however, only ads shown to X Premium subscribers were included till now.
IF enough Premium users pay to upgrade to this ad-free package, that's less revenue share for creators, unless X can also work out a way to build that into the pricing for this new "Plus" package, too.
(Note: X News Daily has reported the ad-free option would remove ads only from your "For You" feed, and not form reply streams.)
In either direction, it's a pretty complicated equation, and X hasn't seemingly worked out all of the details of its payments process as yet.
X's expanded revenue push adds some interesting elements into the social media business mix, but thus far, it's hard to consider them a success or to measure how they might evolve into more significant elements.
But if X gets the motivations right, and more people join up, it might just be a path towards addressing those bot problems, as well as maximizing human-to-human interactions. No platform has managed this yet at scale but it will be interesting to see how X markets this next stage in Premium.