Former Twitter CEO Linda Yaccarino, as reported by Bloomberg, met with the company’s creditors to outline factors contributing to future breakeven. One key reform suggested by the current leadership involves segmenting premium subscriptions into three intermediate levels that determine ad exposure to users.
Subscription Tiers and Elon Musk’s Idea
According to insiders, Twitter’s current $8 per month subscription plan will be divided into three options: Basic, Standard, and Plus. In the Basic tier, the monthly fee won’t impact ad exposure. In the Standard tier, it’ll be reduced by half, while the Plus subscription eliminates the need to view ads. Elon Musk has also proposed introducing a mandatory fee for all users to combat bots, a concept gaining traction.
Progress and Challenges
Despite growth in ad revenue and the return of advertisers, Twitter is dealing with lower advertising budgets, notes NIXsolutions. Yaccarino notes that the company is on track to achieve profitability, excluding debt service costs, but full breakeven may take until the second half of the next year. Twitter’s revenue continues to grow by 8-9% quarter on quarter, driven by advertising, subscriptions, and data licensing. A previous deal with Elon Musk left the company with $13 billion in debt, resulting in annual servicing costs of approximately $1.2 billion, making pure breakeven a longer-term goal.