Elon Musk Says that Twitter Will Start Sharing Revenue with Creators for Ads in Replies

As Musk explained, very soon Twitter will start sharing revenue with creators for ads that appear in their replies to tweets. This adds another way for people to monetize their Twitter presence, although the actual details are important in this case.

First, as Musk notes, only Twitter Blue subscribers (or those who have been verified) will be eligible for the program. This is pretty much in line with Twitter’s broader verification strategy, although the actual elements of “verification” are still questionable (you need a phone number and money, that’s all).

But more importantly, only ads placed in verified user replies will count towards this new revenue pool to be shared with creators.

Wait, you might be thinking, didn’t Twitter halve the ad serving for Twitter Blue followers?

Yes, but not in a way that would affect this proposal.

A major concern in the implementation of Twitter Blue was Musk’s commitment to halving advertising to paid subscribers, which could actually have a large impact on Twitter’s bottom line. The average revenue per Twitter user in the US is (or was) $12 per quarter, with most of that revenue coming from serving ads. So, in theory, this would mean that by cutting ad impressions in half, Twitter Blue followers would get $6 per user per quarter, not just from advertising.

Twitter has toned it down since Musk’s first announcement. Back in April, Twitter announced that Blue subscribers will now see “50% less advertising in the “For you” and “Subscriptions” schedules.‘, but the same in all other elements. This has reduced Twitter’s vulnerability to revenue loss, and is also obviously consistent with this new revenue share element.

Basically, the reduction in ads in Twitter Blue is not affected by this update, as the number of ads shown in replies remains the same, but Twitter still had to make some changes to separate these elements.

So the next part is potential advertising and how much money Twitter creators can expect to make as a result of this new initiative. And probably not very much.

Based on current valuations (reduced ad impressions plus monthly payments), Twitter currently brings in about $30 per Twitter Blue user per quarter.

Twitter Blue currently has about 700,000 subscribers, which, based on these numbers, means that Twitter Blue will bring Twitter about $21 million per quarter. Most of the ad impressions are in the main feed, not replies, so breaking it down you can maybe see where Elon’s $5 million block payment is coming from as a share of the total consumption from Twitter Blue users.

So the problem is dilution. $5 million divided by 700,000 equals about $7.14 per user, so if every Twitter Blue follower posted content that generated the same amount of advertising in their replies, they would receive a small payment from that item every three months (2 .38 dollars per month for reference).

Now it won’t work like that. Some users will earn much more based on the number of responses they see, thus giving Twitter more opportunities to show in-stream ads, giving them a larger share of the revenue. But overall, the payouts won’t be huge – you’ll be lucky to get enough to cover the cost of a monthly Twitter Blue subscription with this program alone.

Which, of course, is still better than nothing you’re getting back now, but it’s not quite on par with YouTube or Instagram in terms of direct revenue based on your in-app content.

(For reference, YouTube pays an average of about $5,000 per million video views.)

But it’s part of a larger monetization drive from Twitter, not the only element, so it’s just another step in its broader revenue sharing plans.

Although potentially more worrying about this initiative is the incentive system it creates, as the new program actually encourages users to post tweets that will generate a large response.

What type of content gets the most responses? Posts that evoke an emotional response will lead to greater engagement, and the emotions most likely to elicit comments include anger, happiness, and fear.

According to a study of 65,000 online posts published by the Harvard Business Review:

“Articles with a lot of comments were found to elicit high-arousal emotions such as anger and happiness, combined with low-dominance emotions where people feel less in control, such as fear. On the other hand, social sharing was highly associated with feeling high dominance, where the reader feels in control, such as inspiration or admiration. Emotional valence was less related to virality, as viral stories had both negative and positive valence. However, the researchers found that negative emotions contributed to higher virality.”

In other words, if you want to encourage more positive interaction, it’s better to focus on sharing information, but if you want to cause more controversy, post content that provokes anger.

This explains why the media landscape has become so fragmented, as online algorithms drive it, because more engagement means more time spent, which is better for ad exposure and therefore bottom line. Facebook’s News Feed algorithm probably did a lot of damage in this regard, so Meta is now trying to change user habits so they don’t argue. But Twitter’s new response-based revenue incentive program may actually be pushing things in the other direction and seeing more angry provocations in tweets as a result.

This seems inconsistent with Elon’s mission to focus on “unspent user minutes” in the app, but then again, Elon himself is apparently a fan of controversy and challenges in the app, so he thinks this might be a better approach.

In any case, the process is unlikely to bring a lot of additional income for users and may stimulate more reasoned actions.

Again, this is just another step in the creators’ broader effort to monetize the app, and each element will add up to give creators more opportunities to monetize the app. But I’m not sure it’s a great addition at this point.