X is moving away from ad-based creator payments

Since Elon Musk took the reins in 2022, X (formerly Twitter) has been riding a financial rollercoaster.

Recent reports from Techloy reveal that the platform’s value has plummeted to just a fraction of its original $44 billion price tag. Advertisers, too, have backed away, forcing the platform into the unusual step of suing a group boycotting its ads.

In response to shrinking ad revenue, X is reshaping its strategy by moving away from ad-based creator payments and making engagement the new currency. Now, creators will earn based on the interactions they drive from Premium subscribers, like likes, shares, and replies.

In the past, creators earned from ad views in their replies. But with Premium and Premium+ users now seeing fewer or no ads—especially in the fully ad-free Premium+ tier—this model wasn’t as profitable for creators. By switching to engagement-based payouts, X offers creators a more direct way to earn, yet this could unintentionally encourage “rage bait,” or content designed to stir up reactions.

This kind of content has already become an issue on Instagram’s Threads, where divisive posts have started to take over users' feeds. Unlike Threads, though, which has acknowledged the issue and attempted to moderate it, X has taken a different route.

Instead of limiting engagement bait, X is leaning in, saying, “The more Premium subscribers' engagement overall, the more revenue you can earn,” encouraging creators to drive interactions however they can.

For creators to access this new payout model, they need to meet specific requirements: Verified status, a follower count of at least 500, and a minimum of 5 million impressions over three months. X hasn’t shared details on how payout percentages might change with this new model, but the message is clear—more engagement could mean more earnings.

With the U.S. elections coming up, this could lead to a rise in politically charged or even misleading content using X's unchecked AI image generator, Grok 2, as creators look to maximize interactions. While X has noted that certain restricted content, like adult material or hate speech, may face limited monetization, there needs to be more guardrails in place.

X’s engagement-focused model could offer more stable earnings for creators amid its ad revenue struggles, but it raises big questions about what kinds of interactions will start to dominate the platform. The future of X could depend on finding a balance between fostering profitable engagement and maintaining a space for authentic conversations.