Elon Musk's big plans for Twitter

A shift to subscription

Elon Musk is now in charge at Twitter.  And one of the many things on his “to do” list is a much bigger subscription offering.

In the years ahead, some industry watchers believe Twitter’s business could look more like LinkedIn or YouTube.

Twitter’s current business model

Twitter’s business model has been slow to evolve. The company generates more than 90 percent of its revenue from advertising, with the bulk of that tied to brand deals.

There’s already been a push to deliver more direct-response ads, which represent a much larger percentage of ad revenue at rivals such as Meta and Snap.

Meanwhile, the Twitter Blue subscription service was rolled out as a way to lessen the company’s reliance on advertising.

But Musk is thinking bigger than that.

$10 billion in subscription revenue.

According to The New York Times, Musk has shared a pitch deck, which projects nearly $10 billion in subscription revenue by 2028.

He’s also reportedly upbeat on the potential for a big payments business.

If those projections become a reality, it would dramatically reduce the percentage of Twitter’s revenue that comes from ads, to around 45 percent according to the report.

So what would getting there look like?

Similar to LinkedIn or YouTube?

The analyst team at Bloomberg Intelligence (BI) has looked to LinkedIn and YouTube as potential models to consider, should Twitter’s subscription push be successful.

Both generate significant advertising revenue, but have also created large subscription businesses.

BI estimates subscriptions represent at least 50-60 percent of LinkedIn’s revenue, while it estimates about 15-20 percent of YouTube’s sales come from subscription.

A return to the public markets?

Assuming Musk achieves his goals, don’t be surprised to see Twitter return to the public markets within a few years.

Analyst Rohit Kulkarni of MKM Partners is already anticipating an IPO in 2026, in a deal he thinks could value Twitter well north of the $44 billion price Musk paid to acquire the company.  Stay tuned!