WhatsApp drops subscription fees (here’s why it matters)
Last year Facebook acquired mobile messaging client WhatsApp for a cool $19.3 billion, and this year the app is making some changes. Traditionally WhatsApp has charged a $1 yearly subscription fee—a significant revenue stream in the context of the app’s 700 million monthly active users. But on Monday the official WhatsApp blog announced that it will be phasing out subscription fees moving forward.
“For many years, we've asked some people to pay a fee for using WhatsApp after their first year,” reads the WhatsApp blog. “As we've grown, we've found that this approach hasn't worked well. Many WhatsApp users don't have a debit or credit card number and they worried they'd lose access to their friends and family after their first year. So over the next several weeks, we'll remove fees from the different versions of our app and WhatsApp will no longer charge you for our service.”
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Of course this raises the question of how WhatsApp will generate revenue in the absence of subscription fees—and the answer to this question is relevant both to businesses and clients. Rather than relying on third-party banner ads, WhatsApp asserts that it is working on B2C tools that will allow businesses and their consumers to usefully connect and communicate.
“That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight,” the blog explains. “We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.”
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Why does that matter for businesses? If you (or your social media team) are not familiar with WhatsApp, now is the time to start. As new tools enable you to communicate with your clients and consumers in a new way, familiarizing yourself with the platform now can go a long way toward effectively establishing your presence in this growing field.