WhatsApp has become the most used messaging application in the world over Facebook Messenger and WeChat. Reaching that leadership was easy for them because it was the first great messaging application available for mobile phones, and from there they did not stop gaining users until they had 1.5 billion according to the latest figures published today. But this has not always been the case.
In its beginnings, WhatsApp was free for the first year, having to pay 89 cents for one year of subscription (0.99 cents), 2.67 dollars for three years, or 3.71 dollars for 5 years. However, almost no one paid for them, since the free period was renewed a few weeks or days before the date was reached and lasted for one or even more years.
However, there was a time around 2014 and 2015 that WhatsApp did get serious about collecting the money, where the application probably did not have enough with the few innocents who decided to pay it before the free renewal. Therefore, during that time they were deactivating accounts until you paid, despite the fact that in the past they waited until the last days for you to pay, and when they saw that you did not, they renewed you. I myself had to pay in 2015 after two weeks without the app, as it did not renew itself.
Everything changed for WhatsApp in January 2016, when the application decided to eliminate the payment of 0.89 cents per year, that no matter how little it was, there were many people who had no intention of paying it or even the means to do so, since there are young people who they have neither PayPal nor credit or debit card.
The arrival of Telegram forced WhatsApp to eliminate the annual payment
However, the reason for eliminating this charge was another that they did not say and that was much clearer: the arrival of Telegram. Pavel Durov’s application began to gain popularity like wildfire at the beginning of 2014 due to the large number of improvements it offered with respect to WhatsApp, such as encryption in WhatsApp messages or the possibility of using it on the PC independently in the mobile. And best of all: it was totally free.
In addition, Facebook had bought WhatsApp in 2014 for 19,000 million dollars, so WhatsApp already had more than enough financial support that allowed Facebook to incur even losses at the beginning in the app in exchange for dominating the most important messaging application in the world. world.
Faced with the possibility that WhatsApp began to lose the hegemony that it had until then, the company decided to make it free. The excuse they gave is that “they realized that the subscription model did not work well because many of the users did not have a debit or credit card, and they worried that they would lose contact with their friends and family after the first free year. “
In that same blog post, they explained how they would continue to make money without the subscription model. Four years have passed, and the only way of monetization remains the same: WhatsApp Business, the application for which companies have to pay WhatsApp in exchange for being able to communicate with customers through whatsapp groups and individually at a time as well offer them a more direct technical service. A system in which everyone wins: WhatsApp, companies, and users.
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The company denied in that same entry that they were going to include ads to make up for the absence of subscriptions, although in May 2019 they declined and announced that they would include ads in the States in a similar way to what Instagram does today in the Stories. The ads will arrive in 2020, although they will not bother much because the application’s Status function is not used by anyone, unlike the resounding success of Stories on Instagram.
Thus, the only way WhatsApp has right now to make money is through WhatsApp Business and the companies that pay to use it, plus the ads that will be included from this year in the States. At the moment they have no other direct monetization route.
The competition has made WhatsApp not stop improving
As we can see, the fact of being the most used application in the world does not mean that it is easy to earn money. The case of Telegram is even more paradoxical in this case because they do not have any monetization, but rather they have the billionaire behind maintaining the app with the money he made selling VK.
WhatsApp also has other ways of monetization that it could exploit, such as launching the WhatsApp Pay system in more countries where it can charge a commission on each transaction, or the introduction of payment sticker packs such as Line has. Or charging to companies for paid whatsapp groups with some new advanced features. Although there would be someone who would pirate them, surely many users would pay to have them directly in the app. This, however, would put WhatsApp at a disadvantage compared to Telegram, which constantly offers new sticker packs and, in addition to already having animated stickers, all packs are free.
In short, and to answer the question that the article titles, WhatsApp is free because it needs to be free for its own subsistence. If they had the monopoly for practical purposes that they had between 2009 and 2014, they would surely continue with the payment model. Luckily, today we have much better alternatives than WhatsApp, such as Telegram or Signal, which threaten to end the reign of the app to the minimum they have.
That is why they have constantly introduced new features since the app is free, such as encryption, stickers, GIFs, dark theme, web mode, calls, etc. Practically all copied from their competitors, whom we have to “thank” for coming to improve WhatsApp. One more sign that competition is good.