Elon Musk, the new owner of Twitter, is throwing everything against the wall to make more money at the social media company.
Since closing his $44 billion acquisition of Twitter last week, Musk and his advisers have discussed adding paid direct messages — which would let users send private messages to high-profile users — to the service, according to two people with knowledge of the matter and internal documents viewed by The New York Times.
They have also talked about adding “paywalled” videos, which would mean that certain videos could not be viewed unless users paid a fee, these people said. And they have discussed reviving Vine, a one-time short-form video platform, which could attract a younger audience coveted by advertisers.
This week, Musk moved to make money from Twitter’s “blue check” verification programme, a method of making sure users are who they say they are. The billionaire announced that the program, which is currently free, will be rolled into the “Twitter Blue” subscription service, which will offer enhanced features for a monthly $8 fee.
The frenzy of product development underlines the pressure that Musk, the world’s richest man, is under to deliver immediate results — and returns — on the technology industry’s largest-ever leveraged buyout. To finance his Twitter deal, he loaded the company with $13 billion in debt, putting it on the hook to pay more than $1 billion annually in interest alone.
But last year Twitter had less than $1 billion in cash flow, partly because of a onetime charge, meaning it generated less money than what it now owes its lenders annually. The company was also unprofitable for eight of the last 10 years. So, to make ends meet, Musk must boost Twitter’s revenue or cut costs — or do both.
Musk has already ordered job cuts across Twitter. On Wednesday, a Twitter employee posted a link to a “severance calculations” document in a company Slack channel, noting that there was a “master list” that included the number 3,738, according to a copy of the message seen by The Times.
If that figure refers to people who could be laid off, and if the number holds, it will amount to about 50 per cent of Twitter’s 7,500-person workforce. Interns were excluded from the list, according to the copy of the message. Some of Musk’s advisers held a conference call on Wednesday evening to try to finalize the number of cuts, according to internal memos and calendar entries viewed by The Times.
Musk is also trying to minimise Twitter’s infrastructure costs. In meetings with engineers, his advisers have proposed saving from $1 million to $3 million in infrastructure costs a day, said three people familiar with the talks. Lieutenants are also looking to make deep cuts to Twitter’s “Redbird” organization, which consists of platform and infrastructure teams, the people said.
Twitter faces difficulties earning advertising revenue under Musk, who has said he may loosen content rules on the service. On Thursday, General Mills and Audi’s US division said they had paused advertising on Twitter because of concerns about content moderation on the platform.
Musk and representatives for Twitter did not respond to requests for comment. Bloomberg, The Washington Post, Axios and Jane Wong, an independent researcher, reported some details of the company’s plans earlier.
In an onstage interview at the TED Conference in April, Musk said owning Twitter “is not a way to make money” and added, “I don’t care about the economics at all.”
Since then, however, the global economy has tipped towards recession, inflation and interest rates have soared and the digital advertising market — which Twitter relies on for revenue — has pulled back. Musk’s own fortune is tied up largely in shares of his electric automaker, Tesla, whose stock has plummeted.
In an attempt to spin up new lines of business at Twitter, over the past week Musk and his advisers have dispatched product teams to brainstorm any and all ideas that could quickly bring in money, according to 10 current and former employees and internal documents discussing the matter.
Three people who have met with Musk or his lieutenants said the focus was largely on how to increase revenue.
One product team is working on paid direct messaging, which appears to be focused on Very Important Tweeters, or VITs, on the network, said the two people with knowledge of the work and according to the internal documents.
According to the product mock-ups seen by The Times, users would be able to send private messages to their favourite celebrities for a nominal fee. A fee structure, which had not been set in stone, could be as little as a few dollars per direct message.
Paid messages could appear in a special area of the direct message inbox, and the celebrities would have to choose to receive them. Twitter would most likely take a cut of the fees, according to the documents.
The plans for paid direct messaging remain fluid, and there is no guarantee that the product will launch.
Product teams are also working on “paywalled” videos, an idea similar to offerings from platforms like OnlyFans, which hosts content for creators in the adult content industry.
Under this plan, Twitter might ask users to pay a fee to watch a video, splitting the revenue with the creators who post the content, two people familiar with the project said.
New York Times News Service