Elon Musk has not been successful in maneuvering through his latest social media venture without a bump in the road. Since Musk bought X, aka Twitter, he has been facing financial slumps. In October 2022, when he completed the deal for $44 billion, the activists lobbied against the corporations spending money to advertise on X. Due to this, the billionaire has to find alternatives to compensate for plummeting advertising revenue.
Elon Musk introduced the $8-per-month subscription plan to increase revenue. He also allowed the content creators to earn money from the advertising revenue. However, it has been difficult for the company to keep up with advertising revenue, which is its main source of income. This is due to Musk’s inflammatory posts and comments, which led to advertisers severing ties with the company. Due to this, X’s advertising revenue has been concerning compared to previous years.
Elon Musk-Owned X Will Reportedly Bring $2.5 Billion In Advertising Revenue In 2023
Twitter, which is now rebranded as X, has been displaying poor performance since Elon Musk took over the microblogging site. The advertisers’ exodus has been leaving X since the billionaire acquired the platform.
Recently, Elon Musk interacted with an anti-Semitic post, peddling conspiracy theories against the Jews. Due to this, advertisers like Walt Disney, Apple, IBM, Walmart, and others have fled the platform.
As the advertisers are leaving the platform, the advertising revenue has been affected. As per a report by Bloomberg, Elon Musk’s X will bring in only $2.5 billion in 2023, compared to $4 billion in 2022. The platform generated only $600 million every quarter in 2023. In 2022, X brought $1 billion each quarter.
The ad sales are the pillar of X, as they comprise 70%–75% of the revenue. To compensate for advertising revenue, Musk introduced the subscription plan. Now, the gross revenue of X in 2023, including the subscription revenue and licensing deals, will be $3 billion.
The original target of Musk for 2023 in advertising revenue was $3 billion, and due to the owner’s erratic behavior, the company has to face a heavy slump in revenue
The Platform Is On The Verge Of Bankruptcy
Elon Musk seems to be rowing a drowning boat with X. While his other ventures’ value soars, X is suffering due to Elon Musk’s controversial views and comments. He seems to have not learned about the Kanye West reinstatement when he reinstated conspiracy theorist Alex Jones on X.
The reinstatement happened on the heels of his recent anti-Semitic controversy, where he supported the “Great Replacement Theory.”
As a result, many major advertisers decided to take their advertisements off X. Another report from Media Matters for America further triggered the advertisers to leave the platform.
A report by the BBC has predicted that X might go bankrupt if it does not find an alternative to compensate for the revenue lost through advertising. The subscription plan will not be able to bring in the revenue that advertising brings.
During an interview with the BBC, Elon Musk admitted that the subscription revenue will not be able to sustain the platform. He said, “If you have a million people that are subscribed for let’s say $100 a year-ish, that’s $100m. That’s a fairly small revenue stream relative to advertising.”
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