Elon Musk’s ascension to the heart of the US government after Donald Trump’s election win has been accompanied by an exodus from X, the social network formerly known as Twitter, that he bought for $44bn in 2022.
Twitter account deactivations have been running hot for some time, perhaps juiced by some of Musk’s changes to the site which have stripped away features for users to protect themselves, cut safety teams and seemingly boosted right-wing content with which Musk himself identifies. The exits spiked, however, during and after the US election in which he had taken a high-profile role.
Where have all those X users gone?
Since Musk’s acquisition, a number of alternatives have emerged, including Threads, an algorithm-heavy, news-light text platform bolted on to Meta’s Instagram since 2023, and Mastodon, a resolutely geeky, decentralized platform that has actually been around since 2016. But the biggest winner in the wake of the Musk-powered election has been Bluesky, another theoretically-decentralised platform that was originally set up in 2019 as a project within Jack Dorsey’s Twitter, but was spun out as an independent operation in 2022.
Bluesky has suddenly seen an explosion in people signing up or deciding actually to post on dormant accounts set up months ago. Earlier this week, it cleared 20mn users, and has been adding something like 1mn users a day. It has even overtaken Threads in terms of active website users in the US, hitting almost 3mn – despite the latter’s huge initial lead built on the well-established Instagram base. But Instagram boss Adam Mosseri has disputed the figures.
In terms of pure user numbers, Threads retains a big lead with 275mn, but that’s not a huge surprise. But there’s also a split on who is joining the two services. Bluesky appears to be picking up many ex-Twitter users, and its audience skews younger and more male. Mastodon, meanwhile, has just shy of 8mn total users, 1mn classed as active.
Bluesky has, quite simply, emerged as the alternative home for those unhappy with X / Twitter. But there are many questions about its future, two of which stand out for the media industry as a whole.
Can it build a successful business with what is effectively a re-creation of early Twitter, when the latter never managed consistently to turn a profit? If it does, what does that mean for media businesses, particularly news publishers, that have seen huge declines in once-buoyant traffic from social media?
To the first question, Bluesky has so far raised $23mn over two funding rounds, $8mn in seed funding led by a “community based” investment fund and a $15mn Series A led by Blockchain Capital in October. That’s a lot of runway for a small operation that – until recently – only employed 20 staff. But maybe not for the major social network it may become.
There are currently two key areas of cost.
The first is infrastructure, basically the cost of handling the data flowing through servers. It’s difficult to know exactly what this will be, based on the demands on the platform and who Bluesky is working with, but we can make some guesses based on X. Back in November 2022, Elon Musk ordered his teams to cut-back server spending by $1.5-3mn a day when the site had roughly 370mn users. Scale that down to Bluesky at 20mn users and the site could be spending as much as $160k a day on infrastructure. That figure may be an overestimate. While there are a lot of similarities between the two services, Bluesky has different features and is built on different architecture. It will also, hopefully, have learned from some of the code bloat that notoriously plagued Twitter. What we can say, however, is that infrastructure costs will scale in line with usage, and previous funding is unlikely to have taken into account the surge in users and the infrastructure costs associated with it.
Scale brings other challenges.
Bluesky has built its audience of disillusioned X-xiles partly on a reputation for caring about trust and safety – being able to block trolls or harassers, quick action against transgressors – that Musk’s X (and to some extent other social media companies) have pulled back from. But, while the business sense of stripping back those protections might be debatable, given its impact on advertising and user experience, they are a cost centre that Bluesky will have to invest in as its audience grows – and as less pleasant users come along.
Even after Musk slashed the trust and safety team at X, there were still around 3,000 people working on it. Bluesky may never need that many, not least as it is building the rest of the service with safety in mind, but there are clear signs that it will have to invest heavily in the area, with impersonation rife and some harassing posts remaining on the platform far longer than is healthy.
How will Bluesky pay for it all?
One way it has already been making money is via its verification system. With some relatively simple steps, users can link their handle to a website they control for free, but Bluesky also offers a way to buy a domain from them. The total opportunity there looks small, however. Chief operating officer Rose Wang also said in October that a subscription premium tier was on the way, offering things like higher-quality video uploads and profile customization. What it won’t offer is the kind of core advantages that X’s premium tier provided, such as a verified check mark which has, in many cases, been abused for boosts to viewability.
It’s difficult to say exactly how many people signed up for X’s premium offering. Estimates range from 650k to 1.4mn. That’s not insignificant, but pales in comparison to ad revenue, even after many big advertisers had fled the platform. Our bet is that Bluesky’s premium offering will have a very different marketing mechanism. X’s premium service annoyed many of its power users, with a verification mark bringing little if any cachet. But Bluesky, at least initially, will be able to lean on the current goodwill of many of those same users. It may not be enough, but we wouldn’t be shocked to see a Bluesky subscription offering build numbers comparable to X’s from a smaller user base.
The other question of what Bluesky’s rise will mean for publishers is, in some ways, more straightforward. What’s undeniable (at the moment) is that Bluesky is a better environment for written media, especially news media, than most other social networks. One simple signal for this is that it opens up links in native browsers rather than in the app. There also appears to be no algorithmic suppression of links that leave the platform, something publishers have been complaining about on other apps, and in particular Twitter, for some time.
Set against that is one simple fact.
Even in the heyday of social traffic, long before Musk’s takeover of X, Twitter was never a huge driver of traffic, simply by dint of the fact that it never grew as big as competitors like Facebook. Even if Bluesky grows to become a platform of hundreds of millions of users, we shouldn’t expect it either to be a huge driver of clicks in absolute terms.
However, where it may become important is for the niches that many publishers are already pursuing. Early signs from those running Substack newsletters, for instance, suggest that referral traffic from Bluesky is rapidly overtaking other sources. That may be the kind of area that sees real benefit. That’s presumably what has attracted publishers who have rushed to join Bluesky this month, including: The Guardian, The Economist and The Week. That’s in addition to the previously-dormant accounts from Politico, Semafor, The lead and Tortoise Media that have sprung back into life. It seems like just the start of a media stampede.
Will Bluesky lead to a renaissance of the social traffic era? No. But is it already a much more friendly place for publishers than what else is currently available? For the moment, definitely yes.
Join us on Bluesky: @ColinMorrisonUK.bsky.social
