For the past three years, OpenAI’s revenue has come primarily from its $20-a-month ChatGPT Plus subscription. According to previously undisclosed internal forecasts, the company's profit structure will undergo a major change this year: a lower-priced, advertising-containing subscription tier will not only attract new users, but will also cause tens of millions of original high-end paying users to downgrade and switch to low-priced versions.
OpenAI CEO Sam Altman
The company's thinking is that the revenue earned from advertising based on its huge user base will exceed the revenue-generating capacity of its current flagship subscription service, ChatGPT Plus.
OpenAI predicted at the beginning of the year,ChatGPT GoPricing is $8 per month in the United States and about $5 per month in other countries such as India. Subscribers will surge approximately 36 times this year to 112 million people.
Affected by this, users of the flagship version of ChatGPT Plus are expected todown 80%, dropped to about 9 million; the number of subscribers of the most expensive professional version, Pro, will double, but will still account for less than 1% of the total users.
The company expects total revenue this year to bemore than double, reaching US$30 billion, and revenue will hit US$284 billion in 2030.
OpenAI predicts that advertising will become the largest source of revenue by 2030, generating approximately US$102 billion, accounting for approximately 36% of total revenue that year.
This prediction also highlights OpenAI’sPersonal consumer businesshighly dependent on. While the company has been aggressively courting large enterprise customers this year, many have turned to rival Anthropic.
Advertising growth has become critical for OpenAI after it missed internal revenue targets in the first quarter.
After the news that revenue fell short of expectations, the share prices of OpenAI cloud partners CoreWeave and Oracle fell 6% and 4% respectively on Tuesday.
OpenAI said on Tuesday that its current consumer business and enterprise-level businessstrong growth across the board.
Facing the fierce competition in the consumer market brought by Google Gemini, OpenAI hopes to increase its revenue through advertising business.
Michael Nathanson, an analyst at research firm MoffettNathanson, said: "Google has entered the game with Gemini, and most Gemini users are using it for free. Google itself has a huge advertising business and is willing to provide Gemini services for free, which will be a huge competitive pressure for OpenAI."
OpenAI currently has over 920 million weekly active users, butOnly about 5%Paid subscription. The company now hopes more users will choose the low-priced subscription tier.
ChatGPT Go was launched in India in August last year and launched globally in January this year. Compared with the free version, this tier can send more conversations, unlock flagship models and other features, and the page will display ads.
The company expects that by the end of this year, ChatGPT Go users will account for 10% of all paying users.92%, compared with just 7% last year.
A large part of user growth comes from the downgrade of original high-priced subscription users: the proportion of ChatGPT Plus users will plummet from 92% last year to 7% this year, which is enough to illustrate the large-scale migration of users to low-priced tiers. Overall, the total number of individual paid subscription users of OpenAI will more than double this year, reaching122 million, further increasing to 306 million in 2030.
As large numbers of users switch to low-priced subscriptions, OpenAI expectsaverage subscription revenue per userIt will drop from about $23 per month last year ($271 annualized) to less than $12 next year ($141 annualized).
At the same time, the annualized revenue per user of advertising will increase from zero revenue last year (the advertising business has not yet been launched) to more than $3 next year, reaching about $59 in 2030.
The vast majority of Meta's revenue comes from advertising. The average annualized revenue per user of its entire platform last year was US$57, which is close to OpenAI's 2030 expectations.
OpenAI is following the business model of platforms such as streaming media Netflix: Netflix will launch a low-priced subscription package with advertising in 2022, and will superimpose a crackdown on account sharing, driving the growth of both subscriber users and overall revenue.
The above prediction is based on the premise that OpenAI can quickly attract advertisers.
The company only launched an advertising pilot in February this year, and by the end of March, annualized advertising revenue had reached US$100 million. According to a previous report by the media "The Information", advertising revenue is expected to be about 2.4 billion U.S. dollars this year and will quadruple next year to nearly 11 billion U.S. dollars.
At the end of last year, OpenAI sounded the “highest priority alarm” and concentrated resources on optimizing the flagship version of ChatGPT.
Since then, the company has cut off some business lines, such as the independent video application Sora, and reduced its e-commerce shopping business layout; instead, it built ChatGPT intosuper app, incorporating functions such as code development and Atlas browser.
The low-price subscription tier is expected to see high growth. One reason is that the company's user growth mainly comes from overseas.
About 90% of OpenAI’s weekly active users come from outside the United States, and India, Brazil, Germany, Indonesia, and France are the top five overseas markets.
Data shows that 70% of ChatGPT Plus subscribers are also outside the United States, with Brazil, Germany, France, Japan, and the United Kingdom being the top five countries for overseas subscribers. In the future, the main users of low-price version subscriptions will most likely come from these regions.
The company also increases marketing efforts in the United States. Industry media Adweek said that OpenAI spent millions of dollars this year to land a Super Bowl advertisement with the slogan "You can just build things", focusing on its coding intelligence Codex.
Major cities have also been covered with outdoor billboards, but so far the promotion has not focused on promoting the low-priced $8 meal.
If it vigorously promotes the $8 subscription tier, it may force its peers to adjust their pricing strategies.
Since ChatGPT launched paid subscriptions in February 2023, OpenAI’s monthly pricing of US$20 has become an industry benchmark; competing professional versions such as Perplexity and Anthropic are priced at US$17 per month.