I know that a percentage of WhatsApp users would stop using the app if they started requiring a payment again –because apparently paying $1 per year for using an application on your $999 phone is outrageous, but I wonder why can't they just make it an option again as an alternative to ads.
So adding forced subscription is a definite death sentence for WhatsApp. Also remember that even if everyone of the 1B people did pay $1 for the service, it will still be impossible for FB to recoup $19B it purchased WhatsApp for.
On the other hand, I would love a "Ad-free" mode for people who are willing to pay (like YT Premium), and ads to support other 99.xx%.
No, they won’t install Signal. If that were a real possibility, you would have done it already. So SMS it is. But I wonder, isn’t SMS more expensive than $1 / year? SMS has had outrageously high rates compared with 3G.
In some parts of the world that’s precisely the reason for WhatsApp’s popularity.
SMS is plaintext - full stop.
Well, no, because I'm perfectly happy using WhatsApp in its current state.
Ads aren't magical things you can slap on a product to make it profitable. For ads to work you need an audience that technically could pay for you product, but who opts not to. You need to understand that Google isn't a create example of ads working, they are the exception. Facebook sort of works, but the US (and to a minor extend the EU) audience subsidies the rest of the user base.
Your right in that the $1, even at $1 per year, Facebook wouldn't be able to recoup the purchase price of WhatsApp. They won't be able to anyway, WhatsApp was never worth $19B. Facebook vastly overpay for the company. The WhatsApp purchase should be seen solely as a way of removing a company that "stole" screen time from Facebook, and now they're looking for an excuse to shut it down and roll the users into Facebook Messenger.
Only folks aren't always just paying $1. He's describing folks needing to set up a freaking payment system for a small amount of money - and that some folks aren't going to be able to do that and others aren't going to be willing. That's even before you get into the actual payment of $1. And this is before even considering there are other free apps that will work. There is a limit to the inconvenience folks will go through for your product if there are simpler alternatives, and being blind to this sort of thing could kill your company.
It also doesn't mean that folks cannot profit from ads. It isn't like all ads require you to pay through the internet - On my phone, I've gotten ads from a local coffee shop chain. I liken this sort of ad a cable tv ad. It might not get folks clicking on a website, but it might get folks in your store.
All this is besides the fact that we're talking about making the subscription model an option in addition to the ad-supported model, not forcing a subscription on everyone. I don't think a single person in this thread has suggested that apart from the people using is as a straw man.
These folks are very wary of subscriptions, regarding them as potential scams or traps and while I'm sure Whatsapp would be successful even with a recurring price tag, I'm confident the service would be nowhere near as ubiquitous as it currently is.
I would pay for whatsup through paypal or something like that.
However India is an extremely price conscious country, and many people would jump ship if WhatApp switches to subscription only. I tend to think that people would tolerate WhatsApp ads if they get the app free.
It will be interesting to see how this will play out.
I still think it's weird to have a product that worth so little to people that they won't pay a dollars a year, and yet it seems to essential in their everyday life.
Regardless, it won't get Facebook the billions they spend on WhatApps back.
Whatsapp is the only software I've seen Indians pay for without thinking twice. 60 rupees per year is very easy to shell out especially when it replaces SMS which would cost you many times more.
The problem in India is not that people won't pay for whatsapp, it's that majority of the people don't have a way to pay. Very small percentage of whatsapp users own credit/debit cards. If a service could integrate with telcos and let users pay through them, I'm sure a lot of Indian users would pay for a lot more services than they do right now.
Many of the telecos, however don't want their user's on WhatsApp, they want them to use SMS, I remember Airtel and other's complaining to the government about OTT services, and trying to force the government to introduce a licensing regime for them.
If WhatsApp has to depend on telecos, they for sure will screw it.
Also unlimited SMS are free these days.
On Airtel, which I use- 4G data 2Gb/day, Unlimited SMS, Unlimited calls(Anywhere in India), for 90 days, comes to like $9(around 599 rupees).
This is a pre-paid plan.
If someone can't pay that they're a waste of bandwidth for facebook's ads, since they can't afford to purchase anything at all.
If what you say is true Facebook can pull the plug on India completely and save money. I doubt that what you say is true.
Yes, and they're a PITA on so many levels. Also, Messenger already has ads.
> Telegram (which has much better groups anyway)
Yes, groups, and especially supergroups (which are highly reminiscent of IRC) are downright awesome.
There are more people using WhatsApp in India (thanks to popularity of image/video/voice-messages) than who can actually read or have usable Bank accounts. If you think they can pay "$1" for something they can get for free (and have been using for free in past), then you are completely out of touch of reality. Apart from the amount (which is not trivial btw), there is no concept of digital payment for masses.
Also I know it's hard for HN crowd to understand, but the concept of paying to protect "Privacy" is completely foreign for majority of the users in the world. I can guarantee you majority of the users (at least in India) will happily let you track them, show targeted ads at them, give you all the personal details you need, heck even give your their Genome for for free without even blinking an eyelid. And I am not saying this is just because of ignorance on their part, but rather "Who cares if they track me" - I get free services in return.
And this is actually not a bad setup really (again I know HN crowd will get their pitchforks out at it): Show Ads to provide actual free services (like WhatsApp, Google search, Maps, etc) to the masses. It's much better IMO then charging for these services and never have the masses be able to use them (like "GPS" would be a premium service for rich people).
Disclaimer: All opinions expressed are mine and only mine and have no connection to my employer (Google).
The real issue is they can't compete with $0.
Also best way WhatsApp can work around this is to just ship their app with the phone, and bill the phone $1 * avg life of the phone.
Heck, I think I'd admit was like that, once upon a time. I stopped only when I started earning enough to be able to spend relatively liberally, sometimes even without looking at the exact price, as well recognized my time's worth something too.
I wonder if the products that Google and Facebook offer would actually be of better quality if they actually charged a certain amount to access their services. They have become so essential that I believe in most markets they could charge $5 to $10 a month and still retain a significant amount of users.
Then again, it gives them an excuse to not have to actually have a decent support staff.
Moreover, Google made ~$15B in Q2 2018 in USA alone. 86% came from ads, so let's assume Google made ~13B from ads in the USA in Q2-18. Even if we were to assume that each of the 240M internet users in the USA pays $10/mo to Google (an obviously false assumption), that is still only $7.2B for Q2-18, or half the revenue they are making from ads.
Because I have Youtube Red I don't have ads, and I can download videos on my phone. Except I can't really download videos, I just kind of cache them in an inaccessible format that randomly fails. Seriously, it's very common for me to go back to older downloaded videos and have Youtube randomly tell me, "well, it's messed up, we'll have to redownload it later."
On top of that, using Youtube Red means that I have extra ads for Youtube Red specific channels that I can't permanently get rid of. On top of that, using Youtube Red means that Google will occasionally decide that I'm not allowed to watch videos on my phone and computer at the same time, because that's "using the account in multiple places."
What I should be doing is using youtube-dl to auto-download playlists without ads and then sync them to my device. But I'm still paying for it, because... I don't know why, I guess I'm lazy. But there's very little reason for anyone to purchase Youtube Red when they can get a better, more private experience by downloading an ad blocker.
The problem is that Youtube offers both a free tier and a paid tier, right next to each other, with no signficant improvements to the paid tier. You're still getting the same algorithmic, eyeball-grabbing, buggy crap in Youtube Red. So I'm skeptical that this is a good comparison - if your goal with paying for apps is to get away from the dirty feeling of having someone watch you and manipulate you, Youtube Red is never going to satisfy that, because it's always going to be developed alongside the free version and it's always going to be reusing that codebase.
Compare that to something like Netflix. Do you think it's a mistake that they don't offer a free tier?
Also YouTube has all the music that people care about and given the success of streaming services I’m going to guess that its lack of success has nothing to do with people not wanting to pay.
I'm not suggested that people in poorer economies should be deprived of targeted advertising. It's just surprising they wield such influence. I guess they make it up in volume.
They're planning for the future. Those people will be the major consumers of the world. The companies that can gain market share in emerging economies now will reap the rewards.
Not being able to afford and not being willing to pay are separate.
That's a big if, though. I wouldn't pay $1/year for WhatsApp messaging as a consumer. But I have a lot of disposable income. When you have a free substitute, these signals get mixed up.
I live in South Africa and I'd pay $50 a year. Throw in a few paid-only features and I'd be quite happy.
All my friends use it. We use it at work for many teams. Video call with family in Australia. Audio with friends in Toronto or Chicago via Bluetooth while driving. That feels like magic. Better quality audio then the cellphone network and just works.
I have Skype, messenger, telegram, had Viber, tried WeChat. Barely use any. WhatsApp is like SMS, focused on my phone contacts, but has groups, audio, video, photos. That's all I want.
Here's an article discussing a local cell data bundle. It's still $1-3 per month. Poor people are willing to pay that because of the better value compared to SMS and voice call costs.
It may sound cruel, but is it crueler than saying "Since you can't afford to pay, just give us access to your emails and private messages"?
Facebook has a different business model and a different mission than those companies.
It really is more cruel to say that because you, in a first world country, can pay 1 dollar much easier than they can pay 1 dollar, you should decide that they're not allowed to pay with their data if they desire.
We're talking mind-boggling levels of poverty. How are they able to even pay for a phone and mobile subscription? Where do they live? How do they eat?
It sounds to me like a made-up sad story used as an excuse for rich corporations. If there are people that poor out there, Facebook could charge the rest of the world while offering the service for free to those that really can't afford it.
Even if you use whatsapp on a $50 phone (which you use for say 5 years) with a $3/month plan (which seems incredibly cheap), you have amortised costs of $46 per year. Increasing it to $47 to get whatsapp does not seem as unreasonable as you suggest.
Malawi is also an _extremely_ poor country, for reference Bangladesh have ≈ 5% smartphone usage with a GDP of ≈ 4000 USD per capita (PPP) while the GDP of Malawi is ≈ 1000 USD (PPP) per capita.
I would argue that not paying (but having the means to actually use whatsapp!) is more of a choice, or lack of payment infrastructure, rather than not having the disposable income to spend 1 USD per year for the service.
If India and Malawi and whatever other country can't pay for WhatsApp, they don't get it or Facebook makes it free just for them. Or they find a way to make the ones that can pay do so.
What's the big deal?
You don't see them telling the FB Messenger team: "Hey, you need to make money."
WhatsApp was acquired February 2014 and end-to-end encrypted April 2016.
> And I am 100% confident that is why they want to find a way to monetize it directly. Not having access to data is not something they are used to.
> You don't see them telling the FB Messenger team: "Hey, you need to make money."
I mean, I'm sure they have. Messenger has ads.
Most of their users come from countries like India(Im an Indian). Where people are very price conscious. And yes they would move on to other free services if charged.
>>because apparently paying $1 per year for using an application on your $999 phone is outrageous
Most smartphones on which people use WhatsApp in India are less than $100 phones. These days you get good usable smartphones in India for around $50 as well.
>>but I wonder why can't they just make it an option again as an alternative to ads.
Because bandwidth costs money.
Best way out of WhatsApp is to ship their app with the phone and have the manufactures charge $1 * avg life of the phone.
Ads are the only way. Even if you want to pay a subscription instead.
Maybe that's why the WhatsApp founder left.
The strain of all these hidden costs is way more than $1, probably on the order of $30. So WhatsApp reaps $1.5B and dumps $45B worth of externalities on its user base. I refuse to pay.
To me, its not necessarily how well are our projects doing. Its more, squeeze out the most we can get from every asset and then squeeze for more.
I understand that Facebook will run just fine with or without the 20%, but I can imagine hearing this news and then looking around the room to find what acquisitions haven't performed well. Almost like a "What have you done for me lately?" vibe. Yes, its a bit warped to think that way (but fun too).
A bonus is to combat competition like Snapchat to Instagram by having a solid alternative.
I didn't notice but is there ads on WhatsApp?