As a "novice" in managing social media, Tesla CEO Elon Musk still shows the same ambition. On May 6 local time, the New York Times published some of the financing plans musk submitted to investors, which listed Musk's operation plan and financial objectives for twitter. The New York Times described these goals as "HTC even incredible".
In Musk's plan, 2028 is an important time node. He said in the plan that Twitter's annual revenue will increase to $26.4 billion in 2028, an increase of more than 400% compared with $5.08 billion in 2021; The number of users reached 931 million, an increase of more than 700 million compared with 217 million at the end of 2021; Single user contribution revenue will reach $30.22, an increase of $5.39 compared with $24.83 in 2021.
Although these goals are "incredible", the content of the plan is in line with Musk's past criticism of twitter.
Significantly reduce dependence on advertising
The plan shows that among the $26.4 billion revenue in 2028, advertising revenue will be $12 billion, accounting for 45%, while subscription revenue will reach $10 billion, and the remaining $4.4 billion revenue will be contributed by businesses such as data authorization.
This revenue distribution is also in line with Musk's long advocated "reducing dependence on advertisers".
As can be seen from Musk's past tweets, he has always opposed the dominance of advertisers on the platform. He believes that without relying on advertising, we can not be coerced by advertisers and maintain real independence and objectivity.
However, from Twitter's past financial data, it is not difficult to find that advertising revenue has always occupied an absolutely dominant position in Twitter's revenue.
In 2021, twitter achieved revenue of US $5.08 billion, of which advertising revenue was about US $4.5 billion, accounting for 89%. In 2020, this figure is also as high as 90%.
Comparison of revenue of different business segments of twitter, blue is advertising revenue, source: statista database
Previously, many analysts said that for twitter under Musk's control, it is inevitable to reduce dependence on advertising, because Musk's claim of "absolute freedom of speech" is bound to lead a large number of financiers to leave the platform. In the past two years, many social media platforms, including Facebook and instagram, have encountered brands canceling advertising due to speech problems.
However, due to Twitter's high dependence on advertising revenue for many years, many analysts said they were not optimistic about reducing the proportion of advertising.
Increase subscription revenue, payment services, etc
Reducing the proportion of advertising revenue of a social media from 90% to less than half is obviously a drastic change. Musk's plan is to use "subscription revenue" and "payment services" to fill the holes left by cutting advertising.
Twitter blue, a paid subscription service just launched by twitter last year, has attracted Musk's attention.
"Twitter blue" is the first paid subscription service of twitter. Users who subscribe monthly can enjoy advanced functions such as canceling tweets and customizing application icons.
Before buying twitter, musk has repeatedly put forward various improvement suggestions for "Twitter blue", including reducing the price (currently $2.99 per month), prepaying the annual fee for the whole year (currently monthly payment), displaying the "authentication mark", accepting local currency and virtual currency payment, etc.
In Musk's latest plan, the number of users of "Twitter blue" will reach 69 million in 2025 and 159 million in 2028, accounting for more than 17% of the total 931 million users.
In addition, payment services will also become one of the main sources of revenue for twitter. Musk said in the plan that by 2028, Twitter's payment service will achieve a revenue of $1.3 billion.
At present, Twitter's payment services only cover rewards, shopping, etc., and the proportion of revenue is almost negligible. The New York Times speculated that due to Musk's successful experience in PayPal, twitter may build its own payment capacity in the future. In other words, it is not impossible for a "Twitter payment" to appear in the future.
In addition, the plan also describes a mysterious subscription service called "X", which will be launched in 2023. It is expected to have 9 million users in 2023 and 104 million users by 2028.
In addition to the business model outlook, the plan also revealed the issue of layoffs, which is of great concern to the outside world. The plan shows that by 2025, twitter will have 11072 employees, and the current number of employees is about 7500. Interestingly, musk has planned the changes in the number of employees in the next few years: the number of employees will increase to 9225 in 2022, 8332 in 2023, and then increase again.
For Musk's acquisition of twitter, there are many losers in the audience. Many analysts believe that Twitter, which has suffered losses for years, has become a "mess" that can't be helped up. However, whether in charge of Tesla or managing SpaceX, musk always shows his vision different from ordinary people. Maybe twitter will become Musk's amazing "masterpiece" in the future.
Net profit of twitter from 2010 to 2021, source: statista database
Reporter / Wu Yuli