According to a forthcoming book by New York Times reporters Kate Conger and Ryan Mack, Elon Musk asked a small group of friends and acquaintances with little or no experience running a social media company to determine the optimal price for Twitter Blue, ultimately settling on $8 a month, which Musk thought was what people typically pay for a cup of Starbucks coffee.
The New York Times article, adapted from “Character Limit: How Elon Musk Destroyed Twitter,” which chronicled the billionaire’s disorderly acquisition of Twitter in October 2022, details how Musk decided how to price Twitter Blue, a subscription service that gives users exclusive features and a blue checkmark.
The feature has since been rebranded as X Premium.
Shortly after acquiring Twitter for $44 billion, Musk began discussing pricing for Blue with people around him, including venture capitalist David Sachs, tech podcaster Jason Calacanis and author Walter Isaacson, who was following Musk closely for his biography of the billionaire, according to the excerpt.
The new Twitter owners received several suggestions.
Sacks argued that the price of Twitter Blue should increase from $4.99 to $20 per month.
“Chanel could make a ton of money selling a $99 bag, but it’s a one-off,” Sachs wrote in an email reviewed by The New York Times. “A ‘sales campaign’ may not be the position we want to be in. A luxury brand can always move to a lower price point, but once a brand has failed it is very hard to move to a higher price point.”
Calacanis, a friend of Musk’s, suggested $99 a year, believing Twitter could attract more users with a double-digit price point rather than charging $100 a year, according to the excerpts.
Musk also approached Isaacson, his biographer.
“This has to be something that everyone can use,” Isaacson told Musk, according to the excerpt. “It has to be a very low price because everyone is signing up for this.”
Sacks, Calacanis, Isaacson and a spokesperson for X did not respond to requests for comment.
According to the excerpts, Musk had almost agreed to charging users $100 a year, but his aide Jen Balajadia argued that the service should be more affordable.
“There are many people who cannot even buy gas right now,” Balahadiya said at one meeting, according to two sources who spoke to Times reporters.
“You know how much people pay for Starbucks? Like $8?” Musk asked, according to the excerpt.
Musk then pulled out his phone and tweeted on November 1, 2022, “Twitter’s current lords and peasants system of distinguishing between those with blue checkmarks and those without is bullshit. Power to the People! Get Blue for $8/month.”
About a year later, Twitter rebranded to X and said it had between 950,000 and 1.2 million premium subscribers, less than 1% of the company’s total users, Bloomberg reported, citing an analysis by independent researchers.
