> With instant messaging services, including [...] and WhatsApp, the app is free.
I'm always amazed how well they did it. Noone ever mentions they start charging you after a year. Yet most people realize this only after they already have a lot of friends they talk to via WhatsApp and can't easily migrate to something else.
>WhatsApp is a lot bigger overseas than it is in the US (largely because it's a free alternative to SMS in countries where SMS carries significant charges).
Not nitpicking here, just genuinely curious. What do they charge in US for sms? Here the cheapest package i suppose would be 20,000 SMS per month for $1 per month. I normally use the 1200 SMS per week for 10 cents per week though, as my usage isn't that much.
> When smartphones came out and WhatsApp was released, the RoW was far more willing to pay the dollars needed to buy WhatsApp (it wasn’t free before FB bought it) because they would easily save on their low but still not free SMS charges.
The dollar was often waived. They were never serious about charging non-business users.
> if the amount of disposable income is the deciding factor
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.
"When people ask us why we charge for WhatsApp, we say "Have you considered the alternative?""
It must be frustrating for those users who really did consider this and thought $1 per year was a bargain. Over time those users may have convinced their friends to sign up and Whatsapp made that choice easy by being available on a lot of platforms.
Everyone has a price. The only way to really avoid this kind of situation is to push things to be decentralised/distributed or fully encrypted. That's even harder to do (but I'm working on it with a bunch of others - see my profile).
> And this was despite it being a paid app at the time (I remember paying a few dollars for lifetime access).
In practice Android users would get their free trial period extended regularly. I'm not sure anyone but iPhone users (who are less price sensitive) actually paid for Whatsapp.
>WhatsApp charges annually for this (already free elsewhere) service.
You get a free trial year. "For all phone types, WhatsApp is free to download and try for the first year. After, you have the option of extending your subscription for $0.99 USD per year."
Do you know that those Indian people had actually paid for WhatsApp? I never had to pay, and most people I know (UK) don't seem to have done either. I don't know what the criteria was but it'd be pretty weird if they were charging people more aggressively in India than the UK. Maybe the whole not charging thing was a bug, it's always seemed weird.
> Maybe a large enough population pays $4/month and can thus subsidize some part of the population
That's how WhatsApp started to fund itself, I remember there being a nominal annual charge ( £1 ) for some users but not for all. There didn't seem to be any obvious rule as to who was pinged to pay-up, perhaps it really was random.
But that was discontinued after they were acquired.
> Just before WhatsApp was bought by Facebook, they were asking for that $1 per year (I remember paying it) and they had 450 million users, in spite of plenty of chat alternatives being on the market ever since the 90s.
How many of those users were actually paying at the time? IIRC they allowed 1 year of free use (even more depending on your country). I don't know what the churn is going to be the moment a currently free customer becomes paying, but it is definitely non-zero. I really don't think that is evidence for a long term sustainable business model if others exist with zero total subscription fees.
> I’m not saying that the ads model doesn’t have its place, far from it, I’m saying that WhatsApp could have lived just fine without it.
The biggest reason for WhatsApp's success was the cost of SMS messaging most international markets. That's actually declined significantly since its introduction, so that's another drag on their pricing power.
Could they have lived? Maybe. But I doubt they'd have 1.5 billion users like they do now, and I don't think they long term trajectory for the business would look sustainable charging $1 a year.
I am in India and I have never been charged for Whatsapp. Every year, whatsapp decides to add more free months.
Also, there is significant competition in the messaging space in India, and Indians are not comfortable paying for anything other than their phones.
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