Elon Musk says Twitter is losing $4 million each day, and that he's willing to try anything he thinks might help the social media platform turn a profit.
First up: Musk's plan to charge Twitter users $7.99 for a blue checkmark on their account. The new service has received backlash from a variety of prominent Twitter users — it's already been paused, after some accounts used it to impersonate high-profile brands and people — but people on the platform are clearly willing to pay.
The key question is: How many?
The simplest answer is that at $7.99 per subscriber, roughly 15 million paying users would generate the $120 million in monthly revenue that Twitter needs to cover its operating losses — $344 million over a recent three-month period, according to its July earnings report.
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But in his first email to all Twitter employees, Musk said "roughly half" of Twitter's revenue needed to come from subscriptions to "survive the upcoming economic downturn," CNBC reported on Thursday.
The other half could come from advertising revenue, which is especially hard to predict amid the bevy of companies currently pausing campaigns on the social media platform.
Twitter's financial projections are also complicated by thousands of layoffs, and multi-million dollar exit packages for some departing executives.
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Still, the overall picture seems clear: Musk is depending on a large number of people to purchase subscriptions, possibly well into the millions.
It could be a tall ask.
'It's going to get worse before it gets better'
At the end of October, Musk ally and reported new Twitter advisor Jason Calacanis posted a Twitter poll asking how much money, if any, users would be willing to pay "to be verified and get a blue checkmark on Twitter."
Of the roughly 2 million users who responded, 18.5% (almost 371,000 people) said they'd pay at least some amount for a subscription.
But the poll isn't necessarily representative of all Twitter users. Daniel Ives, a senior equity analyst at Wedbush Securities, forecasts a best-case scenario of 10% signing up for a subscription service.
That could equate to 23.78 million accounts: In Twitter's July earnings report, the company said it had 237.8 million monetizable, daily active users. But it only happens if everything breaks in Musk's favor, Ives says.
The subscription plan is "an absolute disaster," he tells CNBC Make It. "When 240 million users have essentially gotten Twitter for free, this is like all of a sudden charging $3 for bread at restaurants that you've gotten for free for the last 10 years."
Musk's changes — to the company's workforce and the experience of using Twitter itself — also run the risk of driving away users and business partners.
Several prominent Twitter users have already either left the platform or declared their intentions to do so, rather than pay to maintain their blue checkmarks. In some cases, they're trying out competitors, like Discord or Mastodon. (Twitter did not immediately respond to CNBC Make It's request for comment.)
Twitter's biggest obstacle to profitability won't be its subscription model, Ives says — it'll be convincing advertisers to return to the platform. The company's layoffs will probably make that task more difficult "because they need more engineers and developers and marketing to ultimately drive new initiatives," he adds.
Either way, Ives offers this prediction: "It's going to get worse before it gets better."
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