What Is Twitter Blue? And How Much Subscription Revenue Could Twitter Make?

News that Elon Musk took a stake in Twitter Inc TWTR — and is not joining the board as originally planned — has rocked the investing world over the last two weeks.

What may be lost in the news is that Twitter is working on growing its Twitter Blue subscription offering and could bring an edit button to the platform with or without Musk.

What Happened: For years, Twitter users have begged for an edit button, a way to fix spelling or grammatical errors in published tweets.

Users were excited when Tesla Inc TSLA CEO Musk took a stake in Twitter, making him the top shareholder. Musk also put out a poll asking if users wanted an edit button that got over 4 million votes, with a large majority (73.6%) voting “yes” in the poll.

Twitter confirmed that it has already been working on bringing an edit button forward and that it could be offered to Twitter Blue users, its monthly subscribers in specific countries, as part of the rollout.

Twitter Blue may have gotten another boost when Musk suggested that subscribers of the Twitter offering should have their accounts verified.

Musk also suggested changing the price to $2 a month and varying amounts depending on a user's location. And of course, Musk also suggested the ability to pay for Twitter Blue with Dogecoin DOGE/USD.

Former Twitter CEO Jack Dorsey previously said that Twitter might never get an edit button. Dorsey spoke out several times on the edit button and the ability for people to change the meaning of a tweet after it is already widely shared.

Related Link: Analysis: The Twitter Board Rule That Could Explain Why Elon Musk Isn't Joining 

What Is Twitter Blue?: Twitter Blue was launched in June 2021 in Canada and Australia and made its way to the United States and New Zealand in November 2021. The service costs $2.99 a month in the U.S. and comes with several features not offered to free Twitter users.

When it was initially launched, Twitter Blue offered the ability to bookmark folders of saved tweets, a reader mode and more. Another feature: the ability to undo a tweet, a 30-second window to essentially edit a tweet that is already live.

“Correct mistakes easily by previewing what your tweet will look like before the world can see it,” the company said.

Other added features over time Twitter Blue include ad-free articles from top news sites, the ability to customize your Twitter and getting early access to new tested features. One tested feature was the ability to upload 10-minute videos on Twitter versus the standard 2-minute length.

Twitter Blue users also get dedicated support for subscription specific issues.

Why It’s Important: Twitter ended the fourth quarter with 217 million monetizable daily active users, up 13% year-over-year.

Total revenue in the fourth quarter for Twitter was $1.57 billion, up 22% year-over-year. Twitter sees the majority of its revenue come from advertising, with a total of $1.41 billion in the fourth quarter.

The company’s data licensing and other division had fourth-quarter revenue of $154 million, up 15% year-over-year. Twitter is renaming this segment to subscription and other revenue moving forward and sees it being an important growth driver.

“While very small as a percent of revenue today, we believe Twitter Blue and other subscription-related revenue represents a significant opportunity for Twitter over time,” the company said.

The subscription and other revenue segment will include Twitter Blue, other subscription offerings and revenue from the Twitter Development Platform.

One of the biggest dynamics that emerged over the last two weeks is awareness of Twitter Blue. Many Twitter users may have not been aware that this was an option, and also aware of the undo feature, which is similar in many ways to the request for an edit button.

Twitter said the edit button will roll out in the coming months first to Twitter Blue users, which could provide an immediate boost to the subscription service offering.

Musk promising other features could also boost the subscriber amounts, even if Musk’s ideas don’t come to fruition.

Musk's poll saw over 4 million votes, with over 3.2 million voting yes on an edit button. The poll did not ask if people were willing to pay for the feature. 

If 50% of the people who voted yes were willing to pay $2.99 a month, it would equate to $2.3 million in revenue for Twitter. While this is a small amount, it is also based on just a small number of Twitter users and shows how just one added feature in Twitter Blue could help boost this segment for Twitter. 

TWTR Price Action: Twitter shares were down 3.98% Tuesday afternoon at $45.14, according to Benzinga Pro.