WhatsApp drops monthly subscription fee

CMO Innovation editors
21 Jan 2016
00:00

Underscoring the red hot competition in the messaging space, WhatsApp earlier this week had announced that it will drop its $1 monthly subscription fee.

WhatsApp was acquired by Facebook for $19 billion two years ago, which gives the messaging platform the clout to experiment with other modes of monetization that may well bring substantially bigger returns in the long term.

“For many years, we've asked some people to pay a fee for using WhatsApp after their first year. As we've grown, we've found that this approach hasn't worked well,” explained a WhatsApp representative in the blog post. “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.”

The announcement included an assurance that WhatsApp will not be introducing third-party ads, but would instead look to help users connect with businesses and other organizations that they "want to hear from". WhatsApp said it will be testing out new tools to facilitate this communication starting from this year.

“This is an extremely bold move by WhatsApp that could have far reaching consequences for the B2B and B2C ‘messaging’ and ‘chat-based assistant’ industry,” noted a report on YourStory. “While it may have a minimal effect on WhatsApp’s user base that has probably reached its peak, businesses will look at this opportunity as a ‘gold mine’ to leverage.”

The proximity that smartphone devices have with users, as well as the screen time that users give them is viewed as a huge but as yet underutilized marketing opportunity ripe for messaging apps to exploit.

On this front, it could be argued that WhatsApp is somewhat behind the curve when it comes to monetizing their reach. As we pointed out late last year, businesses such as KLM Royal Dutch Airlines are already engaging with its customers on messaging platforms such as WeChat, which is also used by brands such as Shangri-La Hotel, Zalora and Lazada in the region.

Yet there is no question that WhatsApp has a larger and between-known brand globally, while Facebook does have an excellent track record of monetizing its digital platform. It will be really interesting to see the kind of marketing channels and tie-ups that will be revealed in the weeks and months ahead.

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