Is X’s creator payout update a response to advertisers fleeing the platform?

Elon Musk’s X is stirring things up again — and no, this time it’s not with banter or court battles. Instead, it’s all about how creators get paid on the platform. On October 9, X unveiled what it’s calling its “biggest update to Creator Revenue Sharing yet.” No longer will creators’ payouts depend on ads in replies. Instead, creators will earn money based on engagement with their content by Premium users. Sounds exciting, right?

But here’s the thing: why the sudden change in payout structure? Could it be that the shift isn’t just about enhancing creator experience but more about a necessity? Let’s backtrack to a recent global survey by market research firm Kantar, which revealed a brewing storm at X headquarters. A record number of advertisers — 26% — plan to reduce their ad spending on X in 2025. And these aren’t just mom-and-pop businesses; big names like IBM, Disney, and Paramount have pulled back their ad dollars amid growing concerns over extreme content, antisemitism, and hate speech.

It’s no secret that since Musk’s $44 billion takeover of Twitter in 2022, the platform has struggled to convince advertisers to stick around. Kantar’s global survey put it bluntly: only 4% of marketers feel that X offers “brand safety” (basically, the comfort that their ads won’t show up next to some outrageous, offensive post). That’s a far cry from the 39% who feel safe advertising with Google.

Despite Musk’s attempts to woo advertisers — even his awkward appearance at the Cannes Lions advertising festival didn’t turn things around — the tide hasn’t shifted in X’s favor. And so, X seems to be pivoting its monetization strategy, doubling down on its creators and Premium users.

With a dwindling advertising base, X appears to be leaning on its Premium user model as a new source of revenue. The latest change essentially incentivizes creators to attract and engage other Premium subscribers who pay a monthly fee for perks like a blue checkmark and better visibility. So, if you’re a creator on X and you’ve got fans willing to splurge on X Premium, your paycheck could, theoretically, grow alongside the platform’s Premium subscriptions.

It’s a clever move, especially considering that advertisers aren’t exactly lining up to throw their budgets at X anymore. In this new model, it’s Premium subscriptions — not advertising dollars — that directly support creators. The platform has also teased that “up to” 25% of Premium subscriptions will go straight to creators. Suddenly, Premium users become the financial backbone for content creators, bypassing the traditional reliance on ads.

For creators, this change could sound like a win. More money, fewer ads cluttering up replies, and more support from fans directly engaging with their content. But for X, this might just be survival mode. By rewarding creators for engagement from Premium users, X is attempting to boost its Premium subscriber base and shift focus away from its shrinking ad revenue stream. More subscribers mean more money — for both creators and, of course, X itself.

However, there are potential hiccups. For one, while X claims this new approach will increase creator payouts, there’s no guarantee it’ll be the windfall creators hope for. It could lead to even more Premium users hogging the spotlight in replies, making it harder for non-subscribers to stand out. Plus, some creators are already voicing concerns over low payouts, and there’s skepticism about whether X’s promises will pan out.

At the end of the day, X’s new creator payout model might just be the logical outcome of a platform that’s lost its advertising mojo. With big brands running for the hills and content moderation issues at an all-time high — not only on X — it’s not far-fetched to think this change is a creative (and possibly desperate) move to keep the revenue flowing as advertisers close their wallets.

Featured image: Julian Christ / Unsplash