The struggles facing social media platform X, acquired by Musk two years ago, are back in the spotlight.
The latest controversies include Brazil’s Supreme Court upholding a ban on X, an exodus of advertising and Musk posting an AI-generated image of Kamala Harris as a communist dictator.
Davis said the ban was a brave move to shut down what was viewed as disinformation.
“In the other corner was [X] saying, well, we believe in free speech at all costs.”
As to whether other jurisdictions could follow suit, Davis said they could be thinking about it.
“If it were Facebook, it would be a very different question. Imagine the outrage if any government said no more Facebook and the reaction you would get from the populace but Twitter is a bit fringe, a bit niche, so maybe not that much of a risk on the part of the government.
“The other thing in the background, of course, is, X is also Elon and Elon is also Tesla. Elon is also Starlink and SpaceX. So, do you really want to kick out X and then hope that you’re going to get the Tesla assembly line or hope that you’re going to get continued Starlink coverage? So there’s a lot of moving parts.”
The legal concerns come amidst a drop-off in advertising.
In early August, Reuters reported X had sued a global advertising alliance and several major companies, including Unilever, Mars and CVS Health, accusing them of unlawfully conspiring to shun the social network and intentionally causing it to lose revenue. X accused the defendants of a “massive advertising boycott”.
Davis said some big advertisers, meanwhile, have decided they don’t need to be on X – partially as the audience is shrinking, but also “because of the company your brand keeps”.
“It’s taken it from somewhat loss-making to terribly loss-making,” noting X has never been a particularly commercial product, even when it was Twitter, due to fewer ways of advertising and knowing less about users.
As to how severe this could be for X’s bottom line, Davis said it was a question of how much longer Musk could keep financially supporting the platform.
“Other than emotionally, X is not supporting Musk.”
Listen to the full episode to hear more from Vaughn Davis about why alternative social media platforms have not had the same cut-through as X.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The episode is presented by Georgina Campbell, a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
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