I am trying to figure what might be the exact formula for X’s payout calculations,
Capped Cumulative Payouts
I am thinking from the perspective of what would be the best way to stabilise P and L. If not stable a CFO would at least like their P and L to be predictable.
Say for instance the percentage of Premium Subscribers drop or the growth is reduced - if you do not want this to proportionally translate into your P and L, you’ll attempt to keep the payouts caped.
From what I know, the payouts are monthly - around 20th of every month cycle. So the cap must be something like 25% of user generated revenue - which I believe would include premium subscriptions as well as advertisements.
Even if advertisements fall over time, the impact would translate into creator payouts. Creators on X only grow if X grows - and they share the fall too. This would be a very logical product strategy indeed.
Hence I believe there must be no such static equations like 1000 impressions to $0.01 - such relations might be true for a particular payout period and invalid for the next period.
The best way to predict creator payouts on X would be to know X revenues. Since X is not publicly traded this is going to be difficult.
Instead we can look into how Youtube or Tiktok does it and learn from them.
How Youtube calculates creator payouts
Listing some pointers below,
- Youtube only considers monetised views as part of revenue calculations - which would be an obvious thing to follow for all social medias - sharing from already collected revenue.
- Youtube revenue comes from - different types of advertisements + users with premium subscription. Same in the case of X - but the scale and percentage contribution might be very different.
- Advertisements can be measured by impressions as well as engagements. Premium User satisfaction might only be gaged through positive engagement metrics.
- Longer videos means more ads means more advertisement watch time, however this also mean more churn or drop offs or reduced activation itself. So video duration optimisation would depend on targeted niche.
- Cost per Mille (1000 impression for adv context) changes every payout period based on advertisement demand
- Taxation: Taxes from US views are held at source based on a submitted rate. When views from not within US, the user responsible to pay tax for their region.
Proportional distribution of payouts based on cohorts
Regional - Based on Premium pricing and volume in every country there might be a weightage assigned to that region
Tier of Plan - Premium + user engagement might have higher weightage compared to Premium and further down for Free users
Type of Engagement - Likes, reposts, quote reposts, replies, shares, bookmarks, profile visits, follows. All these can be weighted variably. X will weight the metrics higher that are benefitting them the most - directly or indirectly.
- For instance - what type of engagement allows most Ad placements or Ad impressions? I would say replies because then there are more people joining to browse through. Quote reposts as well because they generate new threads and hence placements.
- what type of engagement drives new premium subscribers to X? The best attraction would be creator payouts but I think the best retention factor happens because of priority positioning of premium replies or dms. Which means X would like to incentivise engagement with premium accounts.
Taxation
within the country of origin and the country where the money is sent