Social media platform X, formerly known as Twitter, is testing paid subscription tiers to diversify revenue and make up for dwindling ad revenue. X is reportedly testing a three-tiered subscription plan that would include Basic, Standard and Plus subscription tiers, reports The Verge. No pricing information, rollout dates or eligible markets for the test have been announced.

Only the Plus tier would eliminate ads, while the Basic subscription would have the same number of ads currently on X, and a Standard subscription would show subscribers about half the ads, according to @Aaronp613 who revealed the code in post on X.

In September, X owner Elon Musk said that lower priced tiers would be coming to X to combat bots. At the time, he indicated that all X users would have to pay a subscription fee to use the platform.

“We’re actually going to come out with lower tier pricing. We want it to be just a small amount of money [and] in my view, this is actually the only defense against vast armies of bots,” said Musk.

Musk did not elaborate on what a lower-priced paid subscription tier might cost, when it would roll out or if a lower-priced tier would have fewer features than the current version of X Premium. Since then, there has been a lot of speculation about what he meant, what a lower-priced tier might cost, and what features it may or may not have. The three-tiered subscriptions may be his answer to ward off bots.

In a brief with debt holders last week, X CEO Linda Yaccarino shared the three-tiered system as a new evolution for X, PYMNTS says. Yaccarino also said that revenue is growing in advertising, data licensing and subscriptions and that the company is cash flow positive, which is contrary to what Musk said this past summer.

According to Yaccarino, 90% of the company’s top 100 advertisers have returned to the X platform. However, they are not spending as much as they previously did. It is not clear whether this is due to the uncertainty of the platform or whether advertisers are tightening their belts on X as they are on other platforms because of the economy.

X currently offers one subscription product for X – X Premium (formerly Twitter Blue) – available for $8 a month or $84 a year for the website, or $11 a month or $114.99 a year for iOS and Android. When Twitter Blue first launched in 2021, the subscription service was $2.99 a month. It increased to $4.99 a month just prior to Musk’s purchase of the platform. A subscription to X premium gives subscribers a customized user experience with longer tweets, editing capabilities and 50% fewer ads.

According to researcher Travis Brown, only 94,000 net users signed up for X Premium between July 1 and August 10, 2023. At least 827,614 users subscribed to X Premium as of mid-August, Mashable reports. X overall has 540 million monthly active users, according to Musk at the end of July. While 827K subscribers would yield at least $79 million in subscription revenue annually, it is still a minute fraction of the total number of potential subscribers.

Insider Take

It is no secret that X has been in trouble since Musk took over. The platform has been in a state of chaos since day 1, as Musk laid staff off, made dramatic product changes, increased pricing, lost key advertisers, and rebranded the company, to name a few of the controversial changes. In theory, a three-tiered subscription plan is an intriguing idea and could be workable if priced reasonably and if each tier is sufficiently differentiated from the others, each with its own value proposition. We hope X will retain a free version or X may be faced with a mass exodus, hurling X into more chaos and uncertainty.

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