Twitter is planning an ad-free version of its subscription product as the company tries to increase revenue and demand for its premium offering.
Elon Musk has targeted an increase in subscription revenue as a key part of the business plan for the social media platform under his ownership.
The Tesla CEO tweeted: “There will be a higher priced subscription that will not allow ads.” Twitter relaunched its premium offer for the second time under Musk in December, offering users benefits including verified account statement for $8 (£6.50) a month on the web or $11 a month for iPhone and Android phone users.
Advertising accounted for 90% of Twitter’s revenue in 2021, but it has declined since Musk bought the business last October, with daily revenue. supposedly falling 40% compared to last year.
Advertisers including carmaker Audi and pharmaceutical firm Pfizer have halted spending on Twitter amid fears of a rise in hate speech on the platform, compounded by a botched Twitter Blue revamp in November that led to jokers to pay for verified status to be able to launch fake corporate accounts.
Musk tweeted Saturday that despite the ad slump, the ads were too frequent on the platform and “too big.” He added: “Taking steps to address both in the coming weeks.”
Musk aims to reduce Twitter’s reliance on advertising as interest payments loom on the $13 billion debt he saddled the company with as part of the acquisition. According to reports, Twitter should do a quarterly payment of $300 million this monthpotentially as soon as this week.
Musk told staff in November that Twitter may not survive a next downturn without a substantial increase in subscription revenue. “Without significant subscription revenue, Twitter will most likely not survive the coming economic downturn. We need about half of our revenue to be subscriptions,” he wrote in a company-wide email.
Twitter Blue is available in the US, UK, Canada, Australia, New Zealand, and Japan.
Musk has liked Twitter to a “plane heading towards the ground at high speed with engines on fire and controls not working” and has pointed to the possibility of bankruptcy for a company that bought for $44 billion. However, last month, Musk played down the possibility of the company going bankrupt, saying it was “no longer on the fast track to bankruptcy.”