In a bold move, X (formerly Twitter) recently announced plans to share advertising revenue with subscribers to X Premium (formerly Twitter Blue).
The initiative has sparked a mixed reaction, with some creators reaping substantial payouts while others are left with mere pennies. This revelation has stirred debate over X’s commitment to supporting its content creators.
The Disparity in Rates
For context, the cost per mille (CPM) is a common metric used to measure the cost of displaying one ad 1,000 times. Typically, X’s advertisers pay around $5 CPM, with premium placements occasionally fetching over $100 CPM.
However, when it comes to payouts for creators, the picture is starkly different. Some creators have confessed to earning as little as $0.07 CPM, a staggering 98% less than the standard $5 CPM rate for advertisers. Others have fared even worse, with one creator receiving a meagre 99.5% less than the standard CPM.
Creators Earning Mere Pennies
The reality is that most creators on X earn less than 1% of the platform’s advertising revenue. When factoring in the higher CPM rates that advertisers pay, the average withholding by X from creators is well over 99%. This paints a troubling picture of how little creators are benefiting from their content.
High Threshold for Payouts
One of the most contentious aspects of X’s revenue-sharing model is the high threshold set by owner Elon Musk: creators must amass 5 million impressions within three months to qualify for payouts. This criteria has left the vast majority of users without any compensation.
X’s Motives and Financial Situation
Critics argue that X’s decision to share such a small fraction of its ad revenue with creators is perplexing, especially in light of the platform’s financial situation.
Even before Musk acquired X, the company had accumulated significant net operating losses. Since his takeover, US advertising revenue has plummeted by a staggering 60%.
A Strategic Media Move
The meagre payouts to creators, while retaining over 98% of ad revenue, appear to be more of a strategic media move. It’s possible that by showcasing a small fraction of creators who are grateful for their 1% share, X aims to generate goodwill among its user base.