X is making a significant change to its creator monetization program, switching from ad revenue share to a percentage of Premium user payments as the financial pool for its participating creator payouts.
As explained by X:
“Creators! We’re excited to unveil our biggest update to Creator Revenue Sharing yet. Payouts are increasing and you’ll now be paid based on engagement with your content from Premium users – not ads in replies. Ads in replies will no longer impact your payout. Instead, you’ll be paid based on engagement with your content from Premium users. So, when your followers subscribe to X Premium and engage with your content, they support you directly. And, because X Premium is growing, your payout is too. The more Premium subscriptions overall, the more revenue you earn.”
So again, rather than basing creator payouts on the amount of ads displayed in post replies, of which only ads shown to Premium subscribers were eligible anyway, now, X is shifting to share a percentage of revenue from Premium user subscription payment instead.
In an explainer of the new process, X says that up to 25% of Premium subscription payments will now go directly to creators, meaning that users will effectively be paying their favorite creators by engaging with them. X says that it’ll analyze user engagement, with “only genuine interactions from Premium users” qualifying for payments.
“Engagement from users on higher Premium tiers are also worth more. We also consider the characteristics of your audience, including who they are and who follows them.”
So, ideally, X will reward creators for generating more genuine engagement, while also penalizing those who seek to assist others via comments to juice their payouts.
It makes some sense, and with X losing advertisers, it should help to ensure that creator payouts don’t continue to decline, as many have found to be the case. But it also means that X’s creator payout program is effectively morphing into a pyramid scheme, in that if you want bigger payouts, you’ll need to encourage your audience to sign up to Premium to support you. And then they can earn their own payouts, by encouraging their followers to sign up too, etc.
How will that impact the amount of revenue that X is able to share with creators?
Well, it depends on how many people have signed up to X Premium. Reports suggest that fewer than a million users have signed up to the program, though more recent additions like its Grok AI chatbot could have increased that, expanding the pool of revenue that X can draw from for this offering.
So let’s say that X now has 2 million X Premium users, paying an average of $8 per month. X says that 25% of that will go to creators, so that would mean that X could have, in total, around $4 million a month to facilitate these new payouts.
Which is not as much as it’s been paying to creators over time. Based on X’s reported payout stats, it’s been sharing around $5 million per month in total with creators as part of this program.
It doesn’t seem like these two match up, but then again, if X’s ad intake is declining, and Premium sign-ups are increasing, maybe they’re close to meeting in the middle, close enough that X is now shifting the incentive to push for more Premium sign-ups instead.
It’s hard to say which is a more sustainable path, given X’s broader ad business woes, but if X can work out a way to get users to essentially pay creators, that could be a better driver for its business.
The overall incentives don’t change a heap, given that creators were already being pushed to prompt as many replies as possible under the old scheme, it’s just the payouts, though it will decrease the pressure on X to keep showing ads in replies.
Either way, X clearly thinks that this is a better way forward, and maybe, if it can encourage more Premium sign-ups, it’ll help the app distance itself from reliance on ad partners.
We’ll find out. X says that the new scheme will come into effect from November 8th.
