New Twitter owner Elon Musk has confirmed plans to charge $8 for users to keep their verified status.

New Twitter owner Elon Musk has confirmed plans to charge $8 for users to keep their verified status. The announcement comes after initial reports of a $20 charge, which has now been lowered. Some say the lowering of the price is a result of Musk’s Twitter exchange with author Stephen King:

King: $20 a month to keep my blue check? F*** that, they should pay me. If that gets instituted, I’m gone like Enron.

Musk: We need to pay the bills somehow! Twitter cannot rely entirely on advertisers. How about $8?

Musk also added that he’ll “explain the rationale in longer form before this is implemented. It is the only way to defeat the bots & trolls.”

A user with a blue tick is considered verified, meaning that they’ve been identified as someone of public interest and is authentic. Twitter rules say to receive the blue badge, your account must be authentic, notable, and active. Musk’s rationale has since been explained in a series of tweets. Here’s what he’s tweeted:

• Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bull****. Power to the people! Blue for $8/month.

• Price adjusted by country proportionate to purchasing power parity. 

• You will also get: Priority in replies, mentions & search, which is essential to defeat spam/scam, Ability to post long video & audio, Half as many ads and paywall bypass for publishers willing to work with us

• This will also give Twitter a revenue stream to reward content creators

• There will be a secondary tag below the name for someone who is a public figure, which is already the case for politicians

• To all complainers, please continue complaining, but it will cost $8

The measures would affect around 400,000 verified accounts on Twitter. Advertising currently accounts for 90% of Twitter’s $5bn annual revenue, but advertising would be reduced for blue ticked users. 

Many Twitter users alongside Stephen King have criticised the proposal. But Musk’s associates and financial backers support it. Jason Calacanis, tech investor and a Musk associate who is part of a team brought in by Musk to run Twitter, tweeted his thoughts. He said, “For everyone wondering why someone would pay for Twitter Blue/Verified, it's going to be a collection of AWESOME features--in addition to the Blue check mark. Twitter will always have a free option, but the paid option will be well worth your consideration!”

He added, “Having many more people verified on Twitter, while removing the bot armies, is the quickest path to making the platform safer & more usable for everyone. These are not the *only* ways to make Twitter safer & more usable, but they will have a quick and dramatic impact.”

He also launched a Twitter poll, asking “How much would you pay to be verified & get a blue check mark on Twitter?”, with the options of $5 a month, $10 a month, $15 a month, and a “wouldn't pay” option. The results were 81.6% voting “wouldn’t pay”, 10.5% voting $5, 2.5% voting $10 and 5.5% voting $15.

Speaking at the Web Summit in Lisbon, founder and chief executive of Binance, Changpeng Zhao, said he backed the plan as it would tackle the problem of bots. Binance is a cryptocurrency exchange that has put $500m into Musk’s Twitter deal. When asked why Binance invested, Zhao said, “We want to be extremely supportive of free speech. We are hoping to increase the freedom of money and free speech comes before the freedom of money.”

According to SimilarWeb research, bots represent less than 5% of monetizable users, but between 21% to 29% of Twitter’s monetizable content comes from bots. “Similarweb researchers found no evidence to support Musk’s claim that up to 20% of monetizable daily active users (mDAUs) are bots,” their blog reads. Other key findings include:

• Referring to the most recent point of comparison as an example, Similarweb estimates that US mDAU in the second quarter of 2022 numbered 40.3 million, which is only 2.8% lower than the 41.5 million US mDAU Twitter reported for the period.

• Similarweb estimates that 19% of mDAU are responsible for all of the content created on Twitter.

• Given Twitter’s relative proportion of 5% bots to mDAU presumption, Similarweb estimates that 20.8% to 29.2% of Twitter’s monetizable content is created by bots, which seems likely to influence the overall user experience for real users.

• Any software program that posts or reposts Twitter content without direct human supervision could be called a bot, but not all bots are evil. The issue is more with bots that evade that officially sanctioned path, faking human interaction. 

Twitter's Current Problems

Assuming all of the current verified users signed up to pay the proposed fee, it would only generate a fraction of what Twitter owes. The Financial Times reported that banks that lent $12.7 billion to Elon Musk for his $44 billion Twitter takeover will hold the debt until early next year as they wait for him to unveil a clearer business plan they can market to investors. General Motors made the decision to pause advertising on Twitter until after it sees how Musk and his new management team handle things.

As Twitter is dependent on advertising to generate revenue, Musk is trying to diversify the ways to pay the bills as there is now the added interest on the debt he took to pay for the deal. According to Barrons, “Interest expense will balloon to more than $600 million from roughly $60 million paid over the past 12 months after Musk used approximately $13 billion in bank debt to complete his buyout, and Twitter had about $5.5 billion of debt before the deal, for a new, consolidated, total of $18.5 billion. That’s an enormous amount of debt for a company expected to generate just $1 billion in 2023 earnings before interest, taxes, depreciation, and amortisation.”

Reports say Musk is also considering laying off staff. Reducing staff by one quarter or a half would shave off $4bn in operating expenses. Last week once his deal was completed, he fired CEO Parag Agrawal, Chief Financial Officer Ned Segal, and legal affairs and policy chief Vijaya Gadde. This week, Chief Customer Officer and ad boss Sarah Personette announced her resignation, adding more uncertainty to how Twitter will change advertising under its new leadership. Chief People and Diversity Officer Dalana Brand, General manager for core technologies Nick Caldwell, Chief Marketing Officer Leslie Berland, Twitter's head of product Jay Sullivan, and its vice president of global sales, Jean-Philippe Maheu have also departed, according to Reuter’s sources.

Another issue is that whilst Musk’s plans aim to tackle the bot problem, it isn’t necessarily bots who are generating hate speech and fake news, another problem Twitter has. Musk himself gave credence to a conspiracy theory about the attack on Paul Pelosi, 82-year old husband of US House Speaker Nancy Pelosi. Musk tweeted a link to an article with baseless claims about Pelosi from a website which is not a real, authentic news outlet. Musk has 112 million followers on Twitter, and his tweeted received more than 28,000 retweets and 100,000 likes before he deleted it. He had written alongside the link that “There is a tiny possibility there might be more to this story than meets the eye.” 

So it seems that misinformation can be spread by the multibillionaire owner of Twitter himself. Musk has dubbed himself a “free speech absolutist” and this is apparent as his goal as he continues to tweet on his proposed plans for Twitter. But under Musk, free speech may end up a grey area for spreading misinformation and using hateful speech. Research from The Network Contagion Research Institute found a 500% increase of the use of the N-word on Twitter within 12 hours of Musk taking over. There was also a spike in the use of antisemitic, homophobic, transphobic, and other racist terms. Many are concerned if this is the future of Twitter under Elon Musk. As he continues to grapple with advertising, the free speech issue will continue to be a thorn in his side.

(Sources: The Guardian, Reuters, The Financial Times, Business Insider, CNN, Tortoise Media, Similar Web, The Independent, Forbes, Barrons, Twitter)