Is Elon Musk’s X project succeeding, or is the platform losing audience and advertisers rapidly, on its way to a hard landing sometime in the near future?

Here’s the truth: Nobody outside of X knows what’s truly going on inside the platform itself, so any claim that X is failing, succeeding, or otherwise is based on fairly limited datasets and estimations. Some of those data sources are likely indicative, but even then, no external provider has full oversight, so only X itself knows what’s truly happening with its user numbers, revenue, etc.

And since X is no longer a public company, it doesn’t have to say, though eventually, we will get more insight, as it wins or loses audience over time.

But right now, we don’t know, and every claim and report comes with a significant “but…” appended afterward.

Three such claims hit the press last week, which, in themselves, seem to represent one thing, but without the full context, they may not mean that much.

Here’s what I mean:

X is now generating a quarter of its revenue from subscriptions and data sales

This comes from a recent report in The New York Post, which would suggest that X is now a lot less reliant on ad revenue, an element that has traditionally made up around 90% of its revenue intake.

Shortly after purchasing the company, Elon Musk noted that he wanted to reduce its reliance on ad dollars, in order to implement his more free speech aligned approach, as ad partners, being such a significant revenue driver, have the power, at present, to force X to change its stances, given their associated exposure risks if X fails to do so.

On the face of it, X is now succeeding in that goal, though most of its revised revenue intake has seemingly come via data partnerships, after X increased the price of its API access back in March.

As per The New York Post:

“Over the last year X has renegotiated data licensing deals with Google, Amazon, Yahoo, Oracle, Microsoft, and Bloomberg to charge heftier fees.”

X Premium subscriptions, meanwhile, remain a smaller revenue driver, with fewer than a million users currently signed up to the program, based on third-party analysis. Though that could change soon, with X now charging a higher monthly access fee for its “Premium+” tier, which also includes access to its new “Grok” AI chatbot.

That could see X bringing in more money through subscriptions, but thus far, ad revenue remains its biggest revenue driver, by a long way, followed by data access, then subscription revenue.

But here’s the “but”. The key variable here is that X is also bringing in 50% less ad revenue overall, which means that, it could well be bringing in more revenue from subscriptions and data just because it’s bringing in a lot less from ads.

So the headline story, that X’s other initiatives are succeeding, is likely not correct, because the overall revenue pie is much smaller to begin with.

For example, in Q2 2022, X’s last report before it moved into private ownership, X brought in $1.18 billion for the period, with $1.08 billion coming from ads, and the remaining $100 million coming from subs/data sales. Given that X has confirmed that its ad revenue is down 50% or more year-over-year, we know that X is now making around $500 million from ads. Which would mean that ads/data would need to be making around $150 million to come in at a quarter of its overall intake.   

So with increased API charges, and a big push on subscriptions, X’s other elements probably aren’t moving the needing in a significant way. But the data can be skewed in a way to make it appear more successful.

So it’s a big “yes, but…” when assessing what the data actually suggests.

X’s total website visits are increasing every month

I’ve seen this quoted a few times, that X’s website visits are on the rise, again based on third-party analysis.

According to one recent, report, total visits to X.com were up 5% in October, while total page views were up 7.6%.

That would suggest that X is actually doing better than some media reports indicate, with other insights showing that X is actually losing traffic and new sign-ups over time.

Many of Elon’s enthusiastic supporters are using this as an example of mainstream media bias, and representative of lies designed to attack Musk. But actually, the real story here is that web visits for X, especially at these rates, are not really that relevant a factor in its overall engagement stakes.

Why? Because around 80% of all of X’s traffic comes via mobile, not the web.

Which means that only a small amount of users are actually accessing the web version, which means that any variation here is not as significant as it may seem.

For example, X currently has around 244 million daily active users. If 20% of them are accessing the platform on the web, that would mean that 48.8 million users are logging into the app via X.com. 5% of 48.8 million, the amount that X reportedly gained in October, is 2.44 million, so the variances we’re talking about in the above figures are 1%-2% shifts in X’s total user base.

Any growth is a positive, but it is worth putting this in context, as another “but” that clouds X’s reported stats.

X has far fewer moderators than other social apps

Last week, as part of its EU reporting obligations, X shared its total number of moderators in the region, which was of much interest to EU officials.

Many concerns have been raised about the company’s approach to moderation under Musk, which has seen it cull 80% of its staff. Does that extend to moderators, and what does that mean for user safety?

We now have the answer, and some have used it to underline these concerns.

According to X’s EU disclosure, the company now has 2,294 moderation staff covering Europe, which is a lot less than TikTok (6,125), Meta (15,000), etc.

Which sounds bad, but X also has far fewer users, which is the real consideration here, in how many staff it has per user, thus highlighting its capacity to respond to issues at relative scale.

On this front, X may be hurting itself by reporting logged in users, as well as “non logged in guests”, in its numbers, of which it has around 60 million of each. Meta is only reporting logged in users, while TikTok hasn’t spelled out exactly what it’s sharing.

But if X were only reporting logged in users, like Meta, its ratios here would look better.

With that in mind, X currently has around one moderator for every 55k EU users. TikTok is at 1/22k, while Meta is 1/38k. So X does have the worst staff-to-user ratio overall, which is a concern, but again, if it were only reporting logged in users, it would be right in between the two, at 1/27k. So maybe not as bad as the main figures suggest.

Which again underlines that every headline figure for X requires extra context, in order to really dig into what the data means, and where it’s actually placed.

And again, we don’t have all the insight. We don’t know X’s full user figures, engagement, and revenue, only X has all the data. And it says that it’s doing fine.

The more you do dig in, the more you end up questioning if that’s correct, but it is worth noting that, unless X provides official, solid numbers, and continues to promote selective metrics, you won’t really be able to tell what they mean on the surface.