Twitter Blue Tick Price in India at Purchasing Power Parity Rate

What has Musk proposed?

Musk considered a $20 subscription fee for Twitter users to blue tick the site. After a pushback from Twitterati — specifically, an angry response from author Stephen King — Musk finally settled for an $8 fee. For global Twitter users, he made a concession of sorts. The charge will be indexed at purchasing power parity, or PPP levels.

This essentially means that he will not multiply $8 with the foreign exchange market exchange rate, but will add it to the real purchasing power of the currencies. So, in India, that would be a factor in how much a rupee has the same purchasing power as a dollar in the US. This will certainly reduce the impact for Indians, as the rupee in terms of PPP is much stronger than the foreign exchange rates set by the market.

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How can Musk do maths in India?

If Musk pauses his calculations on exchange rates, the $8 dollar will be worth approx. 650. But on PPP basis this amount will be much less.

Essentially, Musk may want to consider PPP exchange rates for the dollar worked out by the World Bank in 2021, and it’s almost 23. So, 23 is multiplied by 8, it is approximately 184.

There is another way to extract numbers. The Big Mac Index, invented by The Economist, is accepted as another gauge of the real value of currencies, including the rupee. It comes at the PPP level based on the price of the burger in different countries.

According to the Big Mac Index, the valuation of the rupee is about 54 per cent lower. This makes the real value of the rupee approx. 45. This would mean that $8 would be almost double the previous estimates 360.

But whatever parameters Musk adopts, he will keep in mind that India is a price-sensitive market. Customers are more likely to buy into the plan if they opt for aggressive pricing.

Why Is Musk Curious About Subscription Revenue?

Over the years, Twitter’s revenue has been largely led by advertising. In fact, over 90% of Twitter’s revenue in 2021 was from advertising, with the rest largely coming from data licensing. And yet, Twitter has struggled to work out a viable monetization model — minus the cost of staff and infrastructure — despite its 400 million-odd users, nearly 24 million in India alone. In 8 of the last 10 years, Twitter has reported losses. Musk realizes he has to look beyond advertising to keep Twitter running.

Is this the end of free social media?

So far, social media has remained largely free, and this explains its phenomenal popularity globally. But many popular platforms have found it difficult to churn out profits and build a sustainable business model. Meta’s WhatsApp is another example – despite its wide reach, the instant-messaging platform has struggled to turn profits.

Now, several social media platforms are testing subscription models to create a sustainable revenue stream, from YouTube to Instagram to TikTok. And now, it’s Twitter’s turn.

Global economic adversities will also be a deciding factor. As central banks are busy dealing with inflation, the global economy faces further turbulence. The advertising budgets of companies may be under pressure in the coming months. Indeed, Twitter has already talked about the challenging environment in digital advertising.

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