On Elon Musk’s Proposal For an Ad-Free Twitter

On the 14th of April 2022, Elon Musk offered to buy Twitter for $43 billion. This recent proposal by Elon Musk has scared away some advertisers and users. Musk has made a fortune from tech but does he know how to run a company like Twitter? At the recent TEDD2022 conference Elon Musk made a few statements regarding free speech on social media platforms. He would like to see more unmoderated content on Twitter. His plan seems suitable as he wants to promote and protect democracy. The drawback is that free speech can also result in harassment, bullying, and hate speech. Moreover, Musk completely ignores the core concerns businesses face now regarding advertising revenue and growth.

The lack of experience Elon Musk has in advertising makes a lot of analysts worry. They have a lot of concerns regarding Musk’s move. According to them, he doesn’t know the ins and outs of the Global Media Business. He has nothing to do with communication and media. His Twitter account has 82 million followers, which is even more than Narendra Modi, the PM of India. But it doesn’t reflect that he is good at attracting people. He is trying to persuade shareholders to accept his offer but he has no idea how things might turn out. There are a few examples of such platforms in the past that wanted to promote democracy. But in the end, no one wanted to use them because of the need for moderation.

Musk doesn’t even seem to have any clear view of the short-term and long-term changes. Employees have also expressed their concerns that Musk might overlook the commitments of the company in an attempt to fulfill his desires. Even the data scientists doubt that Musk would prioritize a work-life balance if he gets control over Twitter. Elon Musk believes that he has the solution for every problem but he lacks the expertise and skills necessary to implement these solutions. The founder of a third-party app that attempts to control harassment on Twitter has also stated that if Musk wants to enforce his decision, he must know where to draw the line because no matter what, some level of moderation is always required when it comes to free speech.

Some people speculate that Musk wants to tak back to the past when it was less regulated than today. In the past, there weren’t any policies to take action against harassment, misinformation, and bullying. As a result, people would then justify their actions by saying that they are committed to freedom of expression. After tolerating hate speech during Trump’s presidency, Twitter finally came up with the solution of deleting unnecessary tweets and accounts which break rules and promote hate.

Users and advertisers are expecting Twitter to reject the proposal made by Elon  Musk. According to them, Facebook and Twitter have suggested free speech many times before but it always resulted in a lot of problems. Only larger enterprises and businesses that are already wealthy would be able to pay for an add-free premium to target their audience. As a result, they will be the only ones collecting revenues while the smaller businesses or brands will suffer. Also, Twitter would have to invest money into the configuration of such settings. The company will have to pay from its pocket to make Twitter ad-free for the limited users who would pay to remove ads from their feed.

The revenue model of Twitter is dependent on advertising income. It would be highly disruptive if Twitter becomes ad-free. So, a new model needs to be introduced to lessen the deadly effects of the ad-free premium option. Almost every social network has tried to bring a new model, but all of them have failed so far. According to the stats, the decrease in ad engagement is reported to be around 12%. The cost per engagement has increased by 39%. So, the net loss for the year has to be around $221m. Covid has also had an impact on advertisement spending. Despite this, the ad sales ended up increasing by 22% in the fourth quarter. In the light of these stats, Musk’s decision of buying ad-free subscriptions for $2 per month would only drive advertisers away from Twitter.

Musk’s proposal may have scared advertisers but they can take refuge in the fact that Twitter is a private company. It would still have the right to impose certain limitations on the decision taken by Musk. This may seem like an opposition against ‘Free speech’ but if the moderation gets eliminated from the equation, it would only harm users and advertisers and they might not be willing to use this platform.

In a nutshell, the new proposal and strategy Musk has for Twitter doesn’t make it clear how the whole situation will turn out. However, one thing we are sure about is that brands and their advertisers need to be worried about this current situation. The ad-free Twitter will affect their ad revenues and spendings drastically.

Related Posts