The Economics of an $8 Blue Check

Posted by Jacob Radke

I recently polled my 4,000 LinkedIn followers on whether or not they would pay $8/month for Twitter Blue - the blue check with perks - and the results on 174 votes were 8% yes, 68% no, and 24% don’t have Twitter. Now that sample size isn’t very large, so I also took to finding a poll on Twitter that has a large sample size. On that poll 81.5% said they wouldn’t pay, 5.5% said they would pay $15/month, 2.5% said they would pay $10/month, and 10.5% said they would pay $5 per month. Logically if it were to cost $8/month, you would get all of the $10-15/month users - because it is cheaper - and maybe lose half of your $5/month users. That puts this poll at about 13.25% paying for Twitter Blue at $7.99/month.

Per Twitter’s July 2022 SEC filing:

| "Average monetizable daily active usage (mDAU) for the three months ended June 30, 2022 was 237.8 million, an increase of 16.6% year over year."

Twitter revenue for that quarter was $1.17 billion with net income coming in at -$270 million, though for the first half net income was $243 million, meaning first quarter net income was $513 million.

At 13.25% paying for Twitter Blue that puts revenue at - 237.8M * 13.25% * ($7.99 * 3) - $755 million for the quarter.

That’s not too bad considering Twitter still would dish out ads to the non-paying users.

So let’s assume Twitter still generates ad revenue on its 86.75% of users that don’t pay for Twitter Blue.

For this I am just going to take Twitter’s July 2022 quarterly revenue and multiply it by 86.75%, since Twitter Blue payer won’t really see any ads.

$1.17 billion * 86.75% = ~$1 billion

This puts Twitter’s post Twitter Blue subscription revenue at $1.775 billion, a 51.7% year over year growth rate.

But this is just slightly skewed, because Twitter Blue already existed before Elon Musk took over and it generated the company $100 million in revenue. But this is all you got with Twitter Blue before Elon Musk.

What about the net income side now.

Let’s just say, for a conservative estimate, that Twitter’s 2023 full year revenue would be - $1.5 billion * 4 - $6 billion. Does this make Twitter profitable?

One of the largest expenses on Twitter’s income statement was employees. The average admin assistant made $50k/year with engineers and managers making $100-250k. Twitter had roughly 7,500 employees in 2021 and employee related compensation accounted for more than 50% of the ~$500 million spent in the 2nd quarter of 2022. So if Twitter was spending ~$250 million on employee related compensation in a quarter, they are now paying ~$125 million, after Elon Musk cut ~3,700 employees.

So if all of these assumptions hold true and I’m right Twitter revenues would grow by 51.7% and earnings would grow by - $6 billion - $1.5 billion - $3.8 billion (other operating costs) - 44.03%.

Of course, I’m wrong though.

Twitter already has reports that they have lost a lot of ad revenue as businesses pull ad spending.

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Eli Lilly, $LLY, executives has ordered all Twitter ad campaigns halted.They also paused their Twitter posting schedule.“For $8, they’re potentially losing millions of dollars in advertising revenue,” said Amy O’Connor, a former communications officer at Eli Lilly.

1:56 PM ∙ Nov 14, 20221,206Likes146Retweets

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Major ad firm Omnicom recommends clients pause Twitter ad spend, per Reuters.

1:40 AM ∙ Nov 12, 2022434Likes56Retweets

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Oreo maker Mondelez pulls ads off Twitter, citing hate speech per Reuters.

12:31 PM ∙ Nov 9, 2022637Likes71Retweets

And features of Elon’s Twitter Blue are still being developed.

Twitter is still paying engineers to create the features and paying them on money they aren’t making as advertisers are pulling ads.

I believe Twitter and Elon Musk have a long way to go before they achieve an amazing Twitter win.

But the runway is there for them to achieve a social platform that is not monetized by ads but by its own users, the first of it’s kind, reducing spams, scams, and annoying ads. It will be challenging but Elon is a man of action and commitment, if anyone can do it, it is that man.1


This communication is not a recommendation or endorsement of any product, service, or issuer. Posts do not reflect the views of Fjell Capital, Sanctuary Securities, Inc. or Sanctuary Advisors, LLC, and have not been reviewed for completeness and accuracy. All further communications from this representative must be sent from and received by For additional information, please refer to one of the following consumer websites:,

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