You read that title, and you say — It just had to happen ! Why ? Because it never really seemed as if WhatsApp was ever going to charge that $1 subscription fee after all. And according to a recent announcement from founder Jan Koum, the company is doing away with the concept officially, in the coming weeks.
The decision comes perhaps in wake of a realization that the business model with an annual subscription wasnt particularly likely to endear it to all of its 900 million odd users. Not only because there are a whole bunch of free Instant messaging alternatives out there but also because a significant portion of WhatsApp’s user base — including a large percentage of its users in India — are still plastic shy and the concept of using their credit cards to pay for something — even if the amount is as low as $1 — wouldn’t appeal to them.
So what is next? How is the company supposed to earn money –it isn’t a charity after all — if not via annual subscriptions. The company “could” fall on the advertisement to revenue model, which is also how Facebook, which bought WhatsApp a couple of years ago, operates and generate revenue i.e., through third-party ads.
Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today’s announcement means we’re introducing third-party ads.
However, the company is not planning to introduce advertisements. In fact, folks over at WhatsApp are still not sure about how its going to go about business and indeed, not a single line of code has been written yet on the new project.
However, from what we have been able to gather together, WhatsApp is very likely to take a leaf out of Facebook Messenger’s book and tap into the revenue stream generated by connecting large businesses with potential consumers. As per an official blog post from the company,
Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.
So basically, this could mean businesses having an official WhatsApp account and conducting transactions via that account itself. That is just one example, the potential is really quite limitless.
The announcement also seems to indicate that the service is reaching 1 Billion Monthly Active Users. Facebook CEO Mark Zuckerberg had indicated that monetization would really becomes a priority after the service acquired a billion users.
This may sound a little ridiculous to say, but for us, products don’t really get that interesting to turn into businesses until they have about 1 billion people using them.
The company had already touched the 900 million mark last year in September, so yeah !
If WhatsApp does adopt this model — and Facebook Messenger has already adopted it, Uber for example already offers it services there — it wouldn’t be too long before other messenger services follow suit and what do we know, this could potentially change the face of how we do business online.
IIInnnteresting. Stay Tuned!