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Elon Musk approached a small circle of friends and acquaintances with little to no experience running a social media company to decide the optimal price of Twitter Blue before he landed on $8 a month — an amount he believed people usually paid for a cup of Starbucks, according to an upcoming book written by New York Times reporters Kate Conger and Ryan Mac.
A New York Times story adapted from "Character Limit: How Elon Musk Destroyed Twitter," which documents the billionaire's chaotic takeover of the company in October 2022, details how Musk decided on the pricing of Twitter Blue, a subscription service that gives users exclusive features and a blue checkmark.
The feature has since been rebranded as X Premium.
Fresh off the $44 billion purchase of Twitter, Musk began discussing pricing for Blue with people in his orbit, including venture capitalist David Sacks, tech podcaster Jason Calacanis, and author Walter Isaacson, who was shadowing Musk for his biography on the billionaire, according to the excerpt.
The new Twitter owner got a few suggestions.
Sacks argued that the cost of Twitter Blue should be increased from $4.99 to $20 a month.
"Chanel could make a fortune selling a $99 bag, but it would be a one-time move," Sacks wrote in an email viewed by the Times. "A 'promotional offer' may not be the position we want. A luxury brand can always move down-market, but it's very hard to move up-market once the brand is shot."
Calacanis, a friend of Musk's, suggested $99 a year. According to the excerpt, he thought the double-digit price tag would lure more users than if Twitter charged $100 a year.
Musk also approached his biographer, Isaacson.
"This should be accessible to everyone," Isaacson told Musk, according to the excerpt. "You need a really low price point, because this is something that everyone is going to sign up for."
Sacks, Calacanis, Isaacson, and a spokesperson for X did not respond to a request for comment.
According to the excerpt, Musk was nearly settled on charging users $100 a year until his close assistant, Jehn Balajadia, argued that the service should be more affordable.
"There's a lot of people who can't even buy gas right now," Balajadia said in one meeting, according to two sources who spoke with the Times reporters.
"You know, like what do people pay for Starbucks? Like $8?" Musk asked, according to the excerpt.
Musk then pulled out his phone and tweeted on November 1, 2022: "Twitter's current lords & peasants system for who has or doesn't have a blue checkmark is bullshit. Power to the people! Blue for $8/month."
About a year later, Twitter was rebranded to X, and the company had between 950,000 and 1.2 million premium subscribers — less than 1% of its total user base, Bloomberg reported, citing an analysis from an independent researcher.
