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Remember when WhatsApp required a subscription? One of the first changes made by Facebook after purchasing WhatsApp was to make it available for free. And now t

Remember when WhatsApp required a subscription? One of the first changes made by Facebook after purchasing WhatsApp was to make it available for free. And now they're complaining they can't milk it enough? Oh dear. 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.

h1srf 8y ago
Was it a subscription? I thought it was $1 to purchase(iOS).
- enitihas 8y ago
  I think they had turned to subscription instead of one off purchase after some time.
- mcjiggerlog 8y ago
  $1 per year
  - ksec 8y ago
    it was free for android and $1 for iOS users. subscription came way later..
    - mcjiggerlog 8y ago
      All I know was I had Android and it was £0.99 per year, first year free. I've been using since 2009.
- tigershark 8y ago
  on iOS was purchase, on android was subscription, after a while I think they may have switched to subscription on iOS for the people that didn't buy it.
- coolspot 8y ago
  With $1 purchase you were getting 1 year subscription included. Next year would be $1 in-app purchase.
eitally 8y ago
Yeah ... but a huge fraction of Whatsapp users (in India & Africa especially) use $100 (or less) phones....
- EduardoBautista 8y ago
  Thousands of corporations have survived without having to worry about markets that don't have disposable income. You don't see Apple hurting because they aren't successful in the poorest areas in the world. 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"?
  - Rescis 8y ago
    Applications like WhatsApp noticeably improve the standard of living for people in WhatsApp, as they allow them to communicate with people far easier, cheaper, and faster than otherwise would have been possible. 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.
    - blub 8y ago
      If someone can't afford to pay $1 per year for something that allows them to communicate faster and cheaper then they are so fucked it's not even funny. 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.
      - wolco 8y ago
        Not sure where in the world you live but if the medium income for Malawi is $250 dollars and the medium income where you live is $25,000 convert 1 dollar to $100. Would you pay $100 dollars a year for whatsapp? I wouldn't. For those living in the valley making 250,000 a year that translates to $1,000 dollars. To me that sounds like flushing your money away. The best phones are under 1,000.
polyomino 8y ago
Because they can make more money from ads. Why do you think Facebook for work is so cheap?
sreyaNotfilc 8y ago
I'm wondering if this pressure was in response to the 20% decline on FB stocks. Its as if the shareholders looked at their portfolio in search of companies acquired that could fill that void.
- wereHamster 8y ago
  Facebook didn't lose any money they need for day-to-day operations. The company lost value in the eyes of its shareholders, that's all. Facebook doesn't need to fill any void, as there is none.
- xkjkls 8y ago
  No, this has been going on for awhile now, especially when you look at the high profile defections of many of the original WhatsApp executives.
- zilian 8y ago
  Why does a 20% decline in one day of trading matter after such a bull run-up since IPO ? Its just a tiny warning.
  - sreyaNotfilc 8y ago
    Maybe its my warped understanding of how multi-billion dollar boardrooms are ran. 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).
- brisance 8y ago
  The shareholders can't do anything because they don't have the voting power to effect any meaningful change. It's still Zuckerberg's company and will continue to be until they amends its articles/charter.
r00fus 8y ago
Reminds me of Sandberg complaining when the CA/trump fiasco was unearthed about users having to pay for the free service while FB doesn't allow them to. Ads are the only way. Even if you want to pay a subscription instead. Maybe that's why the WhatsApp founder left.
EduardoBautista 8y ago
I wish I could upvote your comment more than once. We need to recognize companies like Facebook and Google for what they really are, ad companies. I fear that Microsoft might start taking a similar path with what has happened with Windows 10. 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.
- RestlessMind 8y ago
  I would like to challenge you on your belief - YouTube offers an Ad-free mode and the subscriber numbers are still considered to be abysmal [1], considering that it has 1B+ total users. What makes you think charging $5 to $10 per month would retain enough users? Moreover, Google made ~$15B in Q2 2018 in USA alone[2]. 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. [1] https://9to5google.com/2018/01/22/youtube-tv-300k-subscribers/ https://9to5google.com/2018/01/22/youtube-tv-300k-subscriber... [2] https://abc.xyz/investor/pdf/2018Q2_alphabet_earnings_release.pdf https://abc.xyz/investor/pdf/2018Q2_alphabet_earnings_releas...
  - balls187 8y ago
    Getting users to pay for a service that was previously provided to them for free is probably the #2 hurdle for all Freemium products.
    - Moru 8y ago
      In retail it has long been known that when you sell a new product or service you allways start high and go down in price.
  - bad_user 8y ago
anuragbiyani 8y ago
You are completely mistaken if you think adding a subscription-only would not reduce usage of WhatsApp by 10x at least. I am an Indian (WhatsApp's biggest market by far), and know for a fact that hardly 1% of people using it right now in India would be able/willing to set up a payment system AND willing to pay $1 for it (which is not as inexpensive as you think) when there are so many free alternatives. And then it immediately loses its value as a messaging platform (since if my relatives/friends are off it due to forced subscription, what will I do on WhatsApp even though I am ok paying $1). #networkEffect 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%.
- RestlessMind 8y ago
  But those who can afford to pay (either for WhatsApp or for YT Premium) are typically the ones most lucrative for the advertisers. So if I am in charge of such products, what is the incentive for me to invest into these efforts which are only going to add complexity while not making any extra money? What is the compelling reason for offering an Ad-free mode if it is going to be adopted by a tiny fraction?
  - deleted 8y ago
    [deleted]
  - Marsymars 8y ago
    Because as someone who's willing to pay to not have ads, ads are a non-starter for me. If they're forced upon me, I'll switch products, and force anyone I communicate with to switch products to continue communicating with me. (If an individual won't install Signal, I'll drop down to SMS/email for them.)
    - bad_user 8y ago
      In my experience, no, you can’t force alternatives on your friends and family, unless it’s an alternative they already have. 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.
xkjkls 8y ago
Because they paid $19 billion for it and need some form of return on that investment? You can't just throw stockholder's equity around like that and then come up with a plan that maxes out at ~$1 billion a year in revenue.
- jankey 8y ago
  Well, they could, as Zuck has ~ 60% of voting rights.
  - xkjkls 8y ago
    Their stock just took a 20% dive because their main cash flow engine up to this point, the FB app, is showing stagnating engagement. Unless they want to take even great stock hits, which would lead to: greater difficulty to hire, greater difficulty to finance, more employee turnover, decreased ability to fight government regulation, et cetera, then they can't let this investment be wasted.
    - citrablue 8y ago
      The acquisition price is a sunk cost. They still have the asset, and I agree its important for them to not waste it.
      - xkjkls 8y ago
        Sure, but it is analogous to what investors are valuing it with regards to their stock for.
  - freyr 8y ago
    Zuck paid $19 billion for it and needs some form of return on that investment? You can't just lose $16,000,000,000 in personal wealth in a day and come up with a plan that maxes out at ~$1 billion a year in revenue.
    - rightbyte 8y ago
aphextron 8y ago
Your highly detailed personal data is infinitely more valuable to them than a measly $1 subscription fee. Until the incentives around building massive surveillance apparatus and calling them "tech companies" goes away, this will always be the case.
pishpash 8y ago
WhatsApp provides more than $1 of value to me in a year, provided I have already decided to use it. But paying a subscription also represents a psychological commitment, a loss of choice for a year, a mental tracking cost if I should reevaluate annually, an effort cost to convincing others to use it if I want to communicate with them, and an opportunity cost. Because I'm certainly not going to pay $1 to 10 different IM apps though I may keep 10 if they were all free. 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.
- brisance 8y ago
  Your justifications strain credulity. Therefore, you possess the necessary psychopathological qualities to be a successful S&P500 CEO. Congratulations. ;)
rebelidealist 8y ago
$1 - (2% fee + 30c card fee) leaves them with very little. I wonder how they get around the credit card fees. Supposedly Apple would want their 30% cut as well.
- southerndrift 8y ago
  Say they get 30c per user. You get 1T traffic for $1, so 300G for 30c. That's roughly 40Gbytes per year or 100Mbytes per day. As long as people are on expensive mobile plans, there won't be more data.
robryan 8y ago
Doesn’t Facebook make $100per user per year in the US off ads? If WhatsApp can get anywhere near that there would be no reasistic price point which people would actually pay that would work for Facebook.
- brisance 8y ago
  That's the crux of the argument. Most of WhatsApp users are outside of North America; many of them would balk at paying for a $100 phone, so their value is definitely not $100/user/year.
gordon_freeman 8y ago
I would have gladly paid $1/month instead ($12/year) even just to avoid ads infecting the app which I use most on my phone. All of my family, relatives, and friends are on WhatsApp and every type (call, video or message) of communication happens through WhatsApp but this constant pressure of putting ads in the product from Facebook is something I don't like.
kamaal 8y ago
>>I know that a percentage of WhatsApp users would stop using the app if they started requiring a payment again 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.
romanovcode 8y ago
> as an alternative to ads. I didn't notice but is there ads on WhatsApp?

h1srf 8y ago

Was it a subscription? I thought it was $1 to purchase(iOS).

enitihas 8y ago
I think they had turned to subscription instead of one off purchase after some time.
mcjiggerlog 8y ago
$1 per year
- ksec 8y ago
  it was free for android and $1 for iOS users. subscription came way later..
  - mcjiggerlog 8y ago
    All I know was I had Android and it was £0.99 per year, first year free. I've been using since 2009.
tigershark 8y ago
on iOS was purchase, on android was subscription, after a while I think they may have switched to subscription on iOS for the people that didn't buy it.
coolspot 8y ago
With $1 purchase you were getting 1 year subscription included. Next year would be $1 in-app purchase.

eitally 8y ago

Yeah ... but a huge fraction of Whatsapp users (in India & Africa especially) use $100 (or less) phones....

EduardoBautista 8y ago
Thousands of corporations have survived without having to worry about markets that don't have disposable income. You don't see Apple hurting because they aren't successful in the poorest areas in the world. 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"?
- Rescis 8y ago
  Applications like WhatsApp noticeably improve the standard of living for people in WhatsApp, as they allow them to communicate with people far easier, cheaper, and faster than otherwise would have been possible. 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.
  - blub 8y ago
    If someone can't afford to pay $1 per year for something that allows them to communicate faster and cheaper then they are so fucked it's not even funny. 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.
    - wolco 8y ago
      Not sure where in the world you live but if the medium income for Malawi is $250 dollars and the medium income where you live is $25,000 convert 1 dollar to $100. Would you pay $100 dollars a year for whatsapp? I wouldn't. For those living in the valley making 250,000 a year that translates to $1,000 dollars. To me that sounds like flushing your money away. The best phones are under 1,000.

polyomino 8y ago

Because they can make more money from ads. Why do you think Facebook for work is so cheap?

sreyaNotfilc 8y ago

I'm wondering if this pressure was in response to the 20% decline on FB stocks. Its as if the shareholders looked at their portfolio in search of companies acquired that could fill that void.

wereHamster 8y ago
Facebook didn't lose any money they need for day-to-day operations. The company lost value in the eyes of its shareholders, that's all. Facebook doesn't need to fill any void, as there is none.
xkjkls 8y ago
No, this has been going on for awhile now, especially when you look at the high profile defections of many of the original WhatsApp executives.
zilian 8y ago
Why does a 20% decline in one day of trading matter after such a bull run-up since IPO ? Its just a tiny warning.
- sreyaNotfilc 8y ago
  Maybe its my warped understanding of how multi-billion dollar boardrooms are ran. 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).
brisance 8y ago
The shareholders can't do anything because they don't have the voting power to effect any meaningful change. It's still Zuckerberg's company and will continue to be until they amends its articles/charter.

r00fus 8y ago

Reminds me of Sandberg complaining when the CA/trump fiasco was unearthed about users having to pay for the free service while FB doesn't allow them to. Ads are the only way. Even if you want to pay a subscription instead. Maybe that's why the WhatsApp founder left.

EduardoBautista 8y ago

I wish I could upvote your comment more than once. We need to recognize companies like Facebook and Google for what they really are, ad companies. I fear that Microsoft might start taking a similar path with what has happened with Windows 10. 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.

RestlessMind 8y ago
I would like to challenge you on your belief - YouTube offers an Ad-free mode and the subscriber numbers are still considered to be abysmal [1], considering that it has 1B+ total users. What makes you think charging $5 to $10 per month would retain enough users? Moreover, Google made ~$15B in Q2 2018 in USA alone[2]. 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. [1] https://9to5google.com/2018/01/22/youtube-tv-300k-subscribers/ https://9to5google.com/2018/01/22/youtube-tv-300k-subscriber... [2] https://abc.xyz/investor/pdf/2018Q2_alphabet_earnings_release.pdf https://abc.xyz/investor/pdf/2018Q2_alphabet_earnings_releas...
- balls187 8y ago
  Getting users to pay for a service that was previously provided to them for free is probably the #2 hurdle for all Freemium products.
  - Moru 8y ago
    In retail it has long been known that when you sell a new product or service you allways start high and go down in price.
- bad_user 8y ago

anuragbiyani 8y ago

You are completely mistaken if you think adding a subscription-only would not reduce usage of WhatsApp by 10x at least. I am an Indian (WhatsApp's biggest market by far), and know for a fact that hardly 1% of people using it right now in India would be able/willing to set up a payment system AND willing to pay $1 for it (which is not as inexpensive as you think) when there are so many free alternatives. And then it immediately loses its value as a messaging platform (since if my relatives/friends are off it due to forced subscription, what will I do on WhatsApp even though I am ok paying $1). #networkEffect 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%.

RestlessMind 8y ago
But those who can afford to pay (either for WhatsApp or for YT Premium) are typically the ones most lucrative for the advertisers. So if I am in charge of such products, what is the incentive for me to invest into these efforts which are only going to add complexity while not making any extra money? What is the compelling reason for offering an Ad-free mode if it is going to be adopted by a tiny fraction?
- deleted 8y ago
  [deleted]
- Marsymars 8y ago
  Because as someone who's willing to pay to not have ads, ads are a non-starter for me. If they're forced upon me, I'll switch products, and force anyone I communicate with to switch products to continue communicating with me. (If an individual won't install Signal, I'll drop down to SMS/email for them.)
  - bad_user 8y ago
    In my experience, no, you can’t force alternatives on your friends and family, unless it’s an alternative they already have. 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.

xkjkls 8y ago

Because they paid $19 billion for it and need some form of return on that investment? You can't just throw stockholder's equity around like that and then come up with a plan that maxes out at ~$1 billion a year in revenue.

jankey 8y ago
Well, they could, as Zuck has ~ 60% of voting rights.
- xkjkls 8y ago
  Their stock just took a 20% dive because their main cash flow engine up to this point, the FB app, is showing stagnating engagement. Unless they want to take even great stock hits, which would lead to: greater difficulty to hire, greater difficulty to finance, more employee turnover, decreased ability to fight government regulation, et cetera, then they can't let this investment be wasted.
  - citrablue 8y ago
    The acquisition price is a sunk cost. They still have the asset, and I agree its important for them to not waste it.
    - xkjkls 8y ago
      Sure, but it is analogous to what investors are valuing it with regards to their stock for.
- freyr 8y ago
  Zuck paid $19 billion for it and needs some form of return on that investment? You can't just lose $16,000,000,000 in personal wealth in a day and come up with a plan that maxes out at ~$1 billion a year in revenue.
  - rightbyte 8y ago

aphextron 8y ago

Your highly detailed personal data is infinitely more valuable to them than a measly $1 subscription fee. Until the incentives around building massive surveillance apparatus and calling them "tech companies" goes away, this will always be the case.

pishpash 8y ago

WhatsApp provides more than $1 of value to me in a year, provided I have already decided to use it. But paying a subscription also represents a psychological commitment, a loss of choice for a year, a mental tracking cost if I should reevaluate annually, an effort cost to convincing others to use it if I want to communicate with them, and an opportunity cost. Because I'm certainly not going to pay $1 to 10 different IM apps though I may keep 10 if they were all free. 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.

brisance 8y ago
Your justifications strain credulity. Therefore, you possess the necessary psychopathological qualities to be a successful S&P500 CEO. Congratulations. ;)

rebelidealist 8y ago

$1 - (2% fee + 30c card fee) leaves them with very little. I wonder how they get around the credit card fees. Supposedly Apple would want their 30% cut as well.

southerndrift 8y ago
Say they get 30c per user. You get 1T traffic for $1, so 300G for 30c. That's roughly 40Gbytes per year or 100Mbytes per day. As long as people are on expensive mobile plans, there won't be more data.

robryan 8y ago

Doesn’t Facebook make $100per user per year in the US off ads? If WhatsApp can get anywhere near that there would be no reasistic price point which people would actually pay that would work for Facebook.

brisance 8y ago
That's the crux of the argument. Most of WhatsApp users are outside of North America; many of them would balk at paying for a $100 phone, so their value is definitely not $100/user/year.

gordon_freeman 8y ago

I would have gladly paid $1/month instead ($12/year) even just to avoid ads infecting the app which I use most on my phone. All of my family, relatives, and friends are on WhatsApp and every type (call, video or message) of communication happens through WhatsApp but this constant pressure of putting ads in the product from Facebook is something I don't like.

kamaal 8y ago

>>I know that a percentage of WhatsApp users would stop using the app if they started requiring a payment again 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.

romanovcode 8y ago

> as an alternative to ads. I didn't notice but is there ads on WhatsApp?