DigiPolitics

Why Elon Musk-Owned X is Facing Revenue Challenges in India

Elon Musk’s rebranding of Twitter as “X” was intended to reshape the platform, but it has led to a steep decline in revenue in India, with ad income dropping nearly 90% from Rs 208 crore to Rs 21 crore in FY 2023-24. This decline is concerning, as India – a country with 751.5 million internet users, 462 million social media users and a growing digital user base has significant potential for advertising revenue. Platforms like Instagram and Facebook continue to thrive, but X’s new monetization model has not aligned well with Indian users’ expectations, who often prefer free or low-cost services. Regulatory challenges and the strong presence of competitors have also weakened X’s appeal to advertisers. Musk might need to focus on India-specific strategies to address this trend, such as offering more affordable advertising options, creating localized content, and forming partnerships with local influencers. These actions could help X rebuild its reputation in India and drive growth in this crucial market.

The Reasons Behind the Decline in X’s Revenue

First, the shift towards a subscription-based model, such as X Premium, is a key factor in the revenue decline. Musk’s focus on paid services does not align well with the Indian market, where users generally expect free social media access and show high price sensitivity. This misalignment has limited X’s potential to earn through subscriptions in a landscape where platforms like Facebook and YouTube continue to dominate by providing accessible and engaging features that attract larger audiences and higher ad revenue.

Second, increasing competition from visual-centric platforms has further impacted X’s performance. Platforms like Instagram, YouTube, and Facebook continue to capture users’ attention through interactive, visual experiences. With India’s social media audience—particularly younger users—favouring video content, X faces challenges in retaining engagement. As a result, ad budgets and user activity have increasingly shifted toward these platforms, which has reduced X’s share of the digital ad market.

Third, regulatory scrutiny and policy pressures have posed additional challenges for X in India. The country’s stringent IT regulations require social media platforms to uphold user safety, accountability, and adherence to local content policies. X’s content moderation practices and compliance issues have attracted criticism, affecting its standing among Indian advertisers. For X to regain advertiser trust and boost revenue, it must demonstrate apparent compliance with India’s digital regulations, as any perceived non-compliance could further weaken brand trust and revenue potential in this crucial market.

Steps Elon Musk Can Take to Improve Revenue in India

First, develop India-specific monetization models: Instead of relying solely on subscription-based services, X could introduce options tailored to the Indian market. Affordable features like microtransactions or regional subscription plans may work better with Indian users than higher-tier, premium services. Additionally, value-added offerings such as exclusive regional content could encourage users to explore paid options without straining their budgets.

Second, strengthen advertising solutions with localized insights: To compete with platforms like Meta and Google effectively, X should enhance its ad targeting and analytics capabilities, focusing on localized insights. X can improve campaign precision by developing tools that allow advertisers to reach India’s diverse regions, languages, and demographics, attracting advertisers interested in hyper-local targeting. Additionally, X currently has only 12 employees in India, a significantly low number compared to other social media companies operating in the country, which they need to change in timely appropriate action. 

Third, collaborate with influencers and social media creators: In India, influencers are essential in driving digital engagement. Partnering with local creators to produce engaging content could boost X’s popularity. Musk might also consider creating a creator fund to support regional influencers or adding monetization features like live-streaming and in-app shopping, allowing creators to interact directly with followers and drive ad revenue.

Conclusion

In conclusion, X’s revenue decline in India can be attributed to several interconnected factors, including the misalignment of its subscription-based model, intensified competition from visual-centric platforms, and regulatory challenges. To reverse this trend and capitalize on the vast potential of the Indian market, X must adopt strategies explicitly tailored to local users and advertisers. X can significantly improve its appeal and competitiveness by developing India-specific monetization models, enhancing advertising solutions with localized insights, and collaborating with influencers and social media creators. Additionally, strengthening safety and moderation practices and engaging proactively with policymakers will help rebuild trust with both users and advertisers. By implementing these strategies, X can work towards revitalizing its presence in India and harnessing the opportunities within one of the world’s largest digital markets.

About Author

Dr Nikhil Kumar Singhmar is an author and Social Media and Political Consultant based in India. He holds a PhD in social media politics from Jawaharlal Nehru University. He is keenly interested in the discourse and narrative analysis of social media, election strategies, and data analysis.

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