Case Study: Bluesky Monetization

But there’s a problem: how do you make money when your entire brand is built on not being like the platforms that make money?

Social media companies have two main options:

1. Sell ads (but Bluesky’s users probably left Twitter to avoid ads).

2. Charge users (but historically, nobody wants to pay for social media).

So, Bluesky needs a third way – one that keeps the lights on without turning into the thing it was built to replace. This case study examines its options and the trade-offs of each.

The Monetization Dilemma

Bluesky’s open protocol means it doesn’t fully control the user experience. That’s great for decentralization, less great for making money.

Some issues:

• Third-party apps can bypass monetization. If Bluesky charges for features, someone else can build a free version.

• No traditional ad infrastructure. Even if Bluesky wanted to run ads (which it says it doesn’t), users could avoid them by switching to different clients.

• Subscription fatigue is real. People will pay $8 for coffee but complain about $8 for a social network.

Bluesky’s task is to find a model that funds operations without feeling like a betrayal of its mission.

Potential Monetization Models

1. Subscriptions for Premium Features

The Idea: Charge users for things like custom feeds, better moderation tools, or early access to features.

Why It Could Work: Twitter (X) launched Twitter Blue, Discord has Nitro, and even Reddit is testing paid perks. If users value what Bluesky offers, some may pay to enhance their experience.

The Risks:

• Users hate paying for things they got for free. Bluesky could risk alienating its core audience.

• It’s hard to scale. Only a small percentage of users typically subscribe, which may not cover costs.

Best Case: Bluesky pulls a Discord, building a loyal paying base without locking essential features behind a paywall.
Worst Case: Bluesky pulls a Twitter Blue, and nobody pays because the perks aren’t compelling enough.

2. A Marketplace for Developers and Services

The Idea: Instead of monetizing the platform directly, Bluesky could take a cut of an ecosystem where users pay for third-party services – moderation tools, premium feeds, or domain name registrations.

Why It Could Work:

• Aligns with decentralization. Instead of controlling everything, Bluesky acts as a facilitator.

• Sustainable, if developers build useful services. Think Apple’s App Store, but for social media features.

The Risks:

• It requires a thriving third-party ecosystem. If no one builds useful paid features, Bluesky makes no money.

• Could lead to fragmentation. Essential features might end up locked behind third-party paywalls.

Best Case: Bluesky creates an App Store-like economy where users pay for better tools.
Worst Case: It ends up like Mastodon – technically possible to monetize, but nobody really does.

3. Transaction Fees on Social Commerce

The Idea: Bluesky enables direct payments (tipping, exclusive content, premium memberships) and takes a small cut.

Why It Could Work:

• Users are used to paying for digital content. Patreon, Substack, and YouTube all thrive on creator monetization.

• Bluesky doesn’t need to be the product–its users are. If people can build businesses on Bluesky, it can tax them slightly.

The Risks:

• Managing payments is a logistical nightmare. Fraud, chargebacks, and compliance issues abound.

• Most users won’t spend money. It works great for creators, but is that enough to fund the entire platform?

Best Case: Bluesky becomes the go-to space for indie creators, funding itself through small transaction fees.
Worst Case: The only people making money are scammy crypto accounts.

4. Enterprise and API-Based Revenue

The Idea: Charge businesses for premium tools – verified accounts, analytics, moderation support, and advanced API access.

Why It Could Work: LinkedIn makes money this way. Twitter used to before API pricing changes drove developers away.

The Risks:

• Who are the customers? Bluesky is still niche, so businesses may not care enough to pay.

• Developers might resist. Bluesky’s audience skews anti-corporate, and charging for API access could feel like a betrayal.

Best Case: News organizations, brands, and communities find value in paid tools.
Worst Case: Bluesky tries to monetize APIs, developers revolt, and nothing happens.

Strategic Recommendations

To avoid the “cool platform with no money” problem, Bluesky needs a hybrid approach that doesn’t rely on any single revenue stream.

Short-Term (0-12 Months)

✅ Launch a voluntary subscription model (“Bluesky Supporter”) to bring in revenue without locking features.
✅ Build creator tipping – low effort, easy revenue, and aligns with user incentives.
✅ Expand developer marketplace, so third-party services can thrive.

Mid-Term (1-3 Years)

✅ Introduce premium moderation and discovery tools for power users.
✅ Charge for business and organization verification, but keep it reasonable.
✅ Explore transaction fees for commerce and memberships.

Long-Term (3+ Years)

✅ Develop API-based business tools – analytics, insights, and premium access.
✅ Consider a limited advertising model, but only opt-in and privacy-friendly.
✅ Achieve financial sustainability without needing (further) venture capital lifelines.

Conclusion

Bluesky’s success hinges on whether it can monetize without becoming the thing its users left behind.

The traditional ad-driven model is a tough sell, but a mix of subscriptions, marketplace revenue, and transaction fees could provide financial sustainability without alienating its base.

If Bluesky executes well, it could redefine how decentralized networks sustain themselves – proving that social media can thrive without selling user attention to the highest bidder.

If not? Well, there’s always venture funding. Until that runs out.