X Enters the Death Spiral
The edge-lord strikes again in another blow to the company. Is this one fatal?
Giving Elon Musk more airtime causes a dilemma within me. I don't think he deserves it, and I don't want to contribute in even the smallest way to feeding his ego. After all, press is what he wants, and we're all far too quick to give it to him.
But, when the CEO of a multibillion-dollar company tells his main source of revenue to go fuck themselves, it's hard not to resist the temptation to throw in my two cents.
Speaking at the DealBook conference on Wednesday evening, Musk began with the usual nervous laughter and self-deprecating jokes about himself and his companies. But then, either the Ketamine kicked in, or Musk had a brain fart that temporarily erased his memory, causing him to forget he is the CEO of a multibillion-dollar social media platform. When asked by host Andrew Ross Sorkin about recent antisemitic posts on X and whether his company can survive the advertiser boycott, he went turbo;
"I hope they stop. Don't advertise. If somebody is going to try to blackmail me with advertising, blackmail me with money, go fuck yourself. Go fuck yourself. Is that clear? I hope it is."
It didn't stop there. He then directed the threat at Disney CEO Bob Iger (Disney recently pulled its ad spending on X), waving and saying, "Hey Bob, if you're in the audience."
It was absolute, pure and utter cringe, nothing short of embarrassing. The edge-lord throwing his toys out the pram because advertisers don't want to be associated with anti-semitism and a platform that's descending into an alt-right white male fan club.
Try as he might with the bravado to display an appearance of confidence — he appeared to be channeling his inner Tony Stark as played by Robert Downey Jr — he's rattled. The consequences of the ad boycott are serious; Musk admitted so. When Sorkin asked how the business would be affected if advertisers didn't return, he stated,
"It's going to kill the company. The whole world will know that those advertisers killed the company, and we'll document it in great detail. That is what everybody on Earth will know. We'll be gone, and it'll be gone because of an advertiser boycott."
Great leaders can admit and accept blame and responsibility and take the necessary steps to adjust course and fix the issues. In Musk's case, he'd rather ride the coattails of the ideology surrounding him, buy into the self-infatuated belief that he can do whatever he wants, and look to push the blame onto anyone but himself. Let's face it — telling your customers to go fuck themselves (let's not forget, advertisers are the customers, and our eyeballs are the product) is an insane move. A complete advertiser exodus would kill the platform, yet he's asking for it to happen. It's unhinged and shows the facade he has created of being some all-knowing entrepreneurial god is cracking.
I’m trying to understand why. The simplest explanation is this — he didn't want to buy Twitter, he certainly doesn't want to own it, and he's never had a plan for the platform, working off whims and moments of "inspiration" while he scrolls on the platform at 3 am on the toilet. And now, we're seeing the consequences of rudderless leadership.
It's bearing fruit; unfortunately for Musk, it's rotten apples.
In reality, Musk has become the problem that needs fixing on the platform. Yet, when you own the keys to the castle, who is going to lock you out? Linda Yaccarino was brought on to try and restore some confidence with advertisers and is meant to be CEO. But it's clear she's nothing more than a puppet, walking around trying to mop up Daddy Musk's latest mess. She posted on X shortly after Musk's rant and, as per, said a whole lot of nothing.
"Here's my perspective when it comes to advertising: X is standing at a unique and amazing intersection of Free Speech and Main Street — and the X community is powerful and is here to welcome you. To our partners who believe in our meaningful work — Thank You."
It’s another hammer blow to the company’s fading reputation. It leaves two options:
Somehow, Musk has to increase Premium subscriptions, which would elevate the pressure to drive advertising dollars. The problem? Despite feature stuffing and recently adding an ad-free tier, uptake is nowhere near enough even to begin to plug the gap. As of April this year, the service languishes around the 650,000 mark. That means it generates around $5 million annually, a far cry from a) the ad revenue, over $4 billion in 2022, and b) the $44 billion Musk needs to claw back. The one final play is to paywall the entire site, with testing underway on charging users $1 per year, but a move to paid-only will be a paywall of death.
The site enters its death spiral, a continuous downturn leading to catastrophic failure or complete collapse. And there have been downturns aplenty: users leaving, advertisers leaving, antisemitic tweets, disinformation, Yaccarino's car crash interview and now Musk flipping the bird to advertisers. It all adds up to a death by a thousand cuts, a slow and sorry downfall as the platform descends into irrelevance before fading from view.
If X does make its way to the bottom of the death spiral, we can't blame the advertisers. Yes, it's shit that so many of the platforms are beholden to them, and I'd love to see us break away from that stranglehold. But for now, it makes up huge percentages of media companies' income, and you can't recklessly tear them down publicly.
No, if X ends up on its deathbed, we can only blame the man-child who bought the company after making a lousy weed joke.
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