Subscriptions vs. Selling Data: WhatsApp’s Approach to Monetisation

In General/Industry Newsby MediaVision

whatsappThe mobile messaging service WhatsApp earned its share of the limelight when it announced last week that it had over 200 million active users. This massive user base makes it on par with some of the more obvious market leaders, such as Skype, Facebook Messenger and Twitter. It’s little wonder that Google entered negotiations to purchase WhatsApp for a cool $1 billion, or at least that’s what the rumours were. However, this doesn’t mean that an acquisition won’t be on the cards in the future, considering the opportunity for WhatsApp monetisation. We take a closer look at the world’s most popular messaging service.

Messaging in Numbers

Let’s look at the figures of the big players. Twitter has over 200 million monthly active users, Skype has 280 million and although Facebook Messenger’s figures have not been reported, it is the sixth highest ranked free app in Google Play. Compared to these services WhatsApp features well and ranks as the first paid app in the iTunes store and ranks 6th in the Google Play free apps. The success and continued growth of WhatsApp can partially be attributed to its compatibility and availability across all platforms, unlike Apple’s iMessage and BlackBerry’s Messenger (although BlackBerry is currently in the process of making its service available on all platforms). Another win with the global public is the company’s monetisation strategy, which is the fairly simple but highly effective subscription strategy, which won’t be changing any time soon under their operational control.

jan-koum

Monetisation without Advertising

We all love stuff that’s free, but we also love the idea of platforms free from advertising and corporate influence. WhatsApp decided on the latter monetisation model, one that is being used less and less by the big players today. It’s free for the first year, thereafter users pay the nominal fee of 99c (in the US). According to a statement made by CEO Jan Koum, WhatsApp’s monetisation model is still in its early stages, but avoiding advertising is important to the company, which comes as a breath of fresh air at a time when user information and data spins money. When we consider that WhatsApp recently handled 27 billion messages in a 24 hour period and averaging about 20 billion per day, the potential for making money through mining user messages for marketing purposes becomes very apparent. Google in particular has many of its services rooted in personalisation, which in turn relies on extracting user data. The company is also on the hot seat for abusing users’ personal data. Do you prefer the free with advertising model, or a subscription based model? Let us know your thoughts.

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