It’s still not entirely clear what Elon Musk’s vision for X is, as the company formerly known as Twitter continues to focus on various elements within the broader “everything app” scope.
The latest element of focus is live video, and reviving the code base of Periscope, as means to get more people broadcasting themselves in the app.
As Elon demonstrates above, X users can now go live on iOS, with the format essentially an updated variation of what people were using within Periscope back in 2015.
Which, of course, is nothing new, and it’s somewhat unusual for X engineers to be praising this as the dawn of a new “golden age of live-streaming”, when such functionality has been available within X/Twitter itself since 2016, along with live audio in Spaces, and only a small proportion of users, in relative terms, has paid much attention to either.
Because as with live audio trend, and the live video fad that preceded it, the problem with live broadcasting is that it’s hard to create engaging, interesting live streams with any level of consistency. Like YouTubers, anyone can upload videos, but only a tiny fraction of people are able to create entertaining content, and within live streams, that eventually sees more and more junk broadcasts clogging up such systems.
When there’s not much of interest being streamed, people stop checking the live tab, and usage wanes, which is why former Twitter management shut down Periscope in 2021, and subsequently de-prioritized live-streaming in the app.
Yet, now, for some inexplicable reason, Musk and Co. believe that there’s a big audience waiting for it to come back?
In this sense, the new live-stream push seems to reflect a lot of Musk’s X vision, in pitching products that no one has shown much interest in, and hoping that they’ll somehow attract a big audience.
Payments is the big one. Musk’s foundational vision for X stems from payments, based on his experience in building an online payments start-up in the late 90s. His company was eventually acquired, and merged into what would become PayPal, but Musk’s long-held view is that PayPal is “a halfway version” of what it could be, which is the fundamental belief that’s stuck with him over the 25 years since.
So why was PayPal a “halfway version”?
As per Musk (discussing his original vision for X.com in 2009):
“The idea was, “Let’s make a really convenient site that combines all of people’s financial needs into one seamless, easy-to-use location.” And then we had a feature which was the ability to send money and securities from one customer to the next. If you weren’t in the system it would just send an invitation to join the system. At the time it was … a very [simple] thing and we found people really responded to that feature. So we adjusted our focus and started going more and more in the direction of payments and … focused on creating a great payment system. Coincidentally, many of the financial elements turned out to be quite important in creating that payment system because the efficiency of our payments increased dramatically if people kept money in the system. So, by creating inducements to keep money in the system, such as a money market fund that PayPal had with Barclays Global, and a debit card that could directly access your PayPal account, that gave customers reasons to keep money in the system and not take it out. And the cost of a transaction to PayPal of somebody sending from their PayPal balance to another PayPal customer was essentially zero. Whereas if somebody was sending money to somebody else and funding it via credit card, it would cost us, inclusive of fraud … somewhere between 3% and 3.5%. So it is a gigantic difference.”
So while payments became the logical focus, Musk actually wanted PayPal to replace all banking elements, essentially offering fee-free transactions built on top of the PayPal system, or something similar. Musk has repeatedly noted that eBay, which acquired PayPal in 2002, should offer these expanded functions, including checking and direct deposit, which would essentially eliminate the need for banks, while also keeping all of your money within the eBay system, thus leading to more purchase activity.
That was, and is, the vision for X.com, and is where Musk is increasingly angling his push for the newly-named platform.
As Musk explained to the Morgan Stanley Tech Conference earlier this year:
“I think it’s possible [for X] become the biggest financial institution in the world, just by providing people with convenient payment options […] You want to be able to send money easily from one account on X-slash-Twitter to another account effortlessly, with one click. You want to be able to earn interest on the money; you want to be able to have debt, so your interest can go negative.”
So the vision, in this sense, is pretty clear, a platform that essentially becomes a replacement for banks, and wins customers through low to no fees. And once all of your money is already on the X platform, that then makes it much easier to use it for in-app purchases, and eventually, as trust grows in that process, more and more people will then be sending more and more money throughout X, for all different kinds of purposes.
Seems logical, and makes some sense.
Except that a heap of providers have tried exactly this, and like live-streaming, users haven’t shown much interest.
Meta has been trying to facilitate similar for years, with a focus on the Indian market in particular, and facilitating a key process in remittance. Getting regulatory approval has been a big challenge, while even where it has gained approval, and offered such services, user adoption hasn’t exactly been rapid.
Cryptocurrency providers also sought to offer an alternative to traditional banks, with no fees, but many advocates have since found that the security provided by traditional banking systems is a significant loss in this process, due to many trades going bad with no recourse. Apple, meanwhile, has seen some success with its new debit card push, but even then, it’s not able to offer the best deals on the market, which means that it’s unlikely to gain significant traction.
Put simply, the basic premise of offering alternative payment and banking functionality seems unlikely to be enough to win over millions or billions of users. Yet, that’s the central premise that Elon and Co. are going with, as they roll out half-baked, half-working features, which is also in line with Musk’s central driving tenet to keep things as lean as possible in management.
I’m not sure that’s the best approach when building self-driving cars, or indeed rockets, nor will it be if you’re asking people to rely on your platform for all of their banking needs. But Musk seems confident that enough people will trust in him to do just that. And while he is a popular figure, which will end up driving some take-up of such services, it seems unlikely that it’ll gain the traction that he envisions, and that’s before you consider the regulatory hurdles that he’ll have to clear, from various regulators, like the SEC and FTC, whom he’s also loudly and publicly criticized many times in the past.
I’m not sure that they’re going be as open to X’s proposals as he thinks. And with Musk also ruling out offering a cryptocurrency, I don’t see how this becomes an actual thing, for some years at least.
And right now, X is losing money. Ad income is down 50%, while Musk is also moving to offer creator ad revenue share on the funds that are still coming in, while also saddling the company with additional debt due to the loans he acquired for his purchase of the app.
Even if Musk can get his payments/banking vision through the regulatory gauntlet, I’m not sure X can afford to keep the lights on till it might pay off, and again, this is before you consider that there’s no indication that people will even want this if/when it is available.
Like live-streaming, longer posts, paying for verification ticks, the consumer demand just doesn’t seem to match the conceptual growth chart that Musk has in mind.
But Musk appears to operating on an “if you build it, they will come” philosophy, which an extrapolation of the message from the Kevin Costner film “Field of Dreams”, which was originally launched back in 1989.
In 1989, or 1999 in Musk’s case, that may have been true, but it’s hard to see, at least at this stage, how that will bear true with the modern internet generation.
Baseball playing ghosts in cornfields are one thing, but real people, based on real historical evidence, are something else.