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IF Insights: Elon Musk is right about Twitter’s ‘extremely high’ pain level

IFM_Twitter CEO Elon Musk
Elon Musk announced that legacy blue checkmarks would be purged from Twitter accounts verified under the company's previous regime, and the deadline for this is April 20

Twitter CEO Elon Musk has recently stated that the micro-blogging platform is at a stage called “roughly breaking even”, as he claimed that advertisers were returning to the social media site after many of them quit it following his takeover of the platform in October 2022.

In an interview with the BBC, Elon Musk stated that the criticism he’s faced recently has been “rough”, while adding that the pain level of Twitter has been “extremely high”, and that owning the micro-blogging platform hasn’t been “some sort of party”.

It is worth mentioning that the media portal, to which Elon Musk gave the interview, got embroiled in a controversy with the micro-blogging platform as its verified account label was abruptly changed to “government-funded media”.

Elon Musk has been honest enough about Twitter’s current state of affairs. Its ex-CEO Parag Agrawal and the other former executives have sued the portal over fees incurred in a recent storm of legal battles.

Then there was a standoff between Twitter and Substack over the micro-blogging platform censoring links and searches for the newsletter platform. Substack announced a new feature, “Substack Notes”, providing a Twitter-like experience for its user base, something which didn’t please Twitter.

And The List Extends Further

As per media reports, Twitter is now potentially facing fines to the tune of tens of billions of euros in Germany for its inability to take down hate speech posts. Over 600 cases are pending before German courts, with the country announcing an investigation into “suspected systemic failures under the country’s hate speech takedowns law”. The act allows for fines of up to 50 million euros per case.

Twitter has also reportedly been attempting to limit the visibility of tweets including terms describing gender identity and sexual orientation. The micro-blogging platform also cut the API accesses of third-party developers, including those who agreed to pay the new monthly fees which start at a whooping USD 42,000.

The most notable ‘change’ one noticed on the web version of the micro-blogging platform, was the iconic ‘Blue Bird’ logo getting replaced with a doge meme. The move was influenced by a promise Elon Musk reportedly made to a user before taking over the social media giant’s leadership mantle.

The logo change shot the value of cryptocurrency ‘Dogecoin’ to its new high of 10.5%, adding some USD 4 billion to its market value. However, it then fell to a new low of nearly 9%, all in the first week of April 2023, as the iconic ‘Blue Bird’ logo made a comeback again.

Although Elon Musk stopped the crisis over the BBC Twitter label from being snowballed further, the micro-blogging platform hasn’t been that lucky with US-based broadcaster National Public Radio (NPR), as the latter has quit the portal after being labelled “State-Affiliated”.

What About ‘Twitter Blue’?

On April 11, Elon Musk announced that legacy blue checkmarks would be purged from Twitter accounts verified under the company’s previous regime, and the deadline for this is April 20. The only accounts that will keep their blue checkmarks are those subscribed to the new ‘Twitter Blue’.

Confusion is still reigning supreme here. On April 1, it was announced that the portal would begin removing the blue check-mark badges from legacy verified accounts, then on the next day; the micro-blogging platform modified the wording in the description of verified users, stating that “This account is verified because it’s subscribed to Twitter Blue or is a legacy verified account.”

It led to a confusing situation where distinguishing which users have paid for a blue checkmark and which have not got difficult.

And ‘Twitter Blue’ hasn’t been a game changer either. As per researcher Travis Brown, around half of all users subscribed to ‘Twitter Blue’ have less than 1,000 followers. Furthermore, 78,059 paying ‘Twitter Blue’ subscribers have less than 100 users following their accounts (that’s 17.6% of all ‘Twitter Blue’ subscribers). There are 2,270 paying ‘Twitter Blue’ subscribers who have zero followers.

Brown’s methodology was proven to be very accurate when ‘Twitter Blue’ subscriber numbers got leaked from the micro-blogging platform. There are approximately 420,000 legacy verified accounts, which received the checkmark badge for free under the old verification system, but now will lose the feature. That’s a solid bloodbath, to be honest.

Twitter’s Financial Health Going Downhill

In November 2022, Elon Musk said that Twitter has been losing USD 4 million in revenue daily. Fast forward to April 2023, Insider Intelligence claims that the micro-blogging platform’s advertising revenue will fall by 28% by year-end. Analysts also slashed an earlier worldwide revenue estimate of USD 4.74 billion by more than a third to USD 2.98 billion as trust in the Elon Musk-led platform deteriorates.

Insider Intelligence has also noted that The Twitter CEO’s efforts to build up a subscription service “won’t make up for the lost ad revenue.”

Elon Musk also estimated Twitter’s current value at USD 20 billion dollars, which is less than half the USD 44 billion dollars he spent in 2022 while buying the portal. Measures like offering free ads, lifting a ban on political advertising and companies having greater control over the positioning of their ads haven’t worked either, with updates about the portal’s deteriorating financial health dominating the headlines since 2022.

Conclusion

Twitter has been merged with Elon Musk’s other venture X Corp, which also controls Tesla, SpaceX Neuralink, and The Boring Company. More than a merger, the micro-blogging platform needs stability on all fronts (and less of Elon Musk’s antics). While it has introduced enticing features for ‘Twitter Blue’, along with new API pricing, there is no second guessing on the fact that Twitter is under the spotlight for all the wrong reasons, resulting in its brand image getting hit further.

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