Do they really need advertisers? I'm not sure why all these companies think the whatsapp route isn't possible. People are happy to pay a small yearly subscription for apps if they're truly doing something useful. While I don't personally use telegram, I'd argue it falls into the category of "useful enough to pay for".
I’ve used Telegram for years now, along with almost all my family and friends. I’m a huge fan of it, and it’s basically the only IM I use anymore (other than Signal with some tech friends).
If Telegram adds ads, rather than offer us a chance to just pay them, I’ll delete it instantly and push everyone I know to do the same.
I absolutely despise ads of any kind, and go to a decent amount of effort to block them from appearing on any device in my household. I’m totally happy to (and do) pay for useful services/content but if you don’t give me the choice of paying and just stick ads in it then it’ll disappear off my devices instantly.
You're in the minority and pretty much exercising your first-world privileges to dictate what you think the service should do. It's intended to work for everyone across the world, no matter how poor, and I'm 100% sure people from India or Brazil would leave it completely if they had to pay to use the app.
Having non-targeted ads and, potentially, premium features that you can pay for is an optimal middle ground for an app of this size.
Hulu once wrote about how, by offering a higher cost plan without ads, they removed a lot of the complaints about their service
I've always wondered if FB offered a similar option -- $5 or $10 a month to opt out of all adds and tracking -- if a lot of the complaints about their service would also disappear.
Facebook does offer a paid option for “companies”, called Workplace. IIRC, it costs $3 per active user per month. I don’t know about feature parity with the surveillance based facebook.com. Of course, Workplace cannot be used with random people that one may interact with across different spheres of life.
That number seems wildly off. Facebook's annual revenue for 2020 was $85.97 Billion[1]. With 2.8 Billion monthly active users, they'd need to charge $3 a month to exceed that number.
Thanks for digging it up! It did help. As Slymon99 had pointed out, Facebook doesn't earn the same amount from each user. Something I hadn't taken into account.
it's from their quarterly financial reports. rough estimate. for developing markets they generate about 2$ per user. and in developed markets like $7 per user.
When Facebook bought WhatsApp for 20 Billion USD, WhatsApp had about 1 Billion users, or slightly less. So that's at least 20 USD per user that Facebook paid.
I prefer to word it slightly differently - have a paid service that offers a free ad-supported version.
The danger, of course, is that once you separate it out like that you quickly realize that the advertisers want the paying customers, not the freeloaders and so ads encroach on the he payment plans, too.
Not the OP but I'm coming from what sounds like the same place.
In theory yes but does the ad SDK used by the app still gather data on me, even though the ads are turned off/app is paid for? Without clear indication that it will not, the answer for me is 'no'.
Absolutely. I gladly pay for YouTube Premium, Subscribe to Twitch streamers I like to remove ads there, and other services that do an ad-supported free tier than a premium ad-free tier.
Other replies to me are reading me wrong, I didn't say "I hate ads therefore I believe no one should ever use ads", I said "I hate ads and would happily pay for me to personally not see them". Telegram can fill their apps with ads if they want, for those that can't/won't pay, as long as there's an option for us to pay and not see them.
i have zero problems with this kind of monetization. i mean, that's why i pay for youtube and spotify -- i wanna support the services/content creators in some way, but i abhor ads.
Ah I think I confused things. I must’ve responded thinking you were one of the people saying Spotify is essentially worthless to artists. Which is true in a financial sense like YT equivalent things, but yeah, you support in other ways.
I wonder if you're typical though. Many people will likely be using it along with other IM apps to communicate with colleagues/friends/family and balk at paying even marginal amounts. Perhaps an ad supported model with ad free premium, or free to receive, but pay to send over x messages a month etc.
Whatever they decide they'll likely annoy lots of their users.
Although I suspect Discord is still some way from profitability, it's monetisation strategy seems to be working well (charge subscription for premium membership with small features like custom emojis, animated profile pics, better audio quality). A surprising amount of people go for it.
Telegram has many nerdy hobby communities which could buy the cosmetics or whatever and subsidise the service for the normal users.
A thing that a lot of people pay for is the better video screen sharing quality. People are happy to have "just about okay" for free, and "good" for a subscription fee.
I use Telegram a lot and would gladly pay for it. However, that route is not so easy. People in Latin American countries can't really afford to pay for apps. If they have to choose between a free WhatsApp (who everybody uses) and a fee (which can be high in real terms for poorer countries) they will choose WhatsApp.
They can also do what companies like Steam and Netflix do, charge a differentiated fee by country. Some games which cost 20 US dollars might cost less than 2 US dollars in countries like Argentina (Steam)
This is basically why Facebook doesn't offer a free option either, they make hardly anything from third world countries per user, but prob $50+ per year from USA users.
So - third world countries can't pay a subscription, and for USA its just not worth it because hardly anyone would pay $50+ a year to use Facebook.
How about 2USD/year? WhatsApp ran on 1 until Facebook bought it.
I did the math at the time: with the users per server and separate user stats they were publishing, each employee could be paid very, very generously. Don't quote me on it but I think it was something like half or a quarter million per year. Yes, they were small and growing, as you grow you get more overhead as you try new things like eg. business customers or whatever, so maybe it can't be 1/year anymore (also because a decade of inflation happened in the meantime), but you can get very close to that or choose to operate in low and middle income countries at break-even or a small loss. I wouldn't find that unfair (as someone who earns in the top 1% of worldwide incomes, household income like 150k/year -- yes I'm looking into how to put that boatload to good use -- and who would be paying the compensatory high price).
This trope keeps being repeated. It isn’t true. Whatsapp was on and off charging iPhone users $1 one time vs being free. Android users got the first year free then a small fraction paid $1 once or $1/year.
Most probably estimates are that 5% of Android users ever paid. While a bigger possibly majority fraction paid $1 for the iPhone app.
Yeah. Similarly, people pay for many services, Apple, Netflix, these, by switching locations. It isn’t exactly fair either for people on the poverty line in the US to pay the US prices when other places don’t have to.
How much money does whatsapp actually get from people in those countries? I was under the impression that ad revenue from third world users was very low. How much would it be to charge them the same amount they would get from ads?
A paid telegram would be crippled from large part userbase. I would not be able to convince anyone from friends and family to use it if it were paid - they can't see the value before installing.
It would make it a hurdle for the young userbase. When I started using Whatsapp I was ~16, and didn't have access to a credit card or any other way to pay for a yearly subscription (and I'm not sure if my parents would have okayed it).
WhatsApp made every year free for 90%+ of Android users. Maybe 95%+. It is hard to find people who paid for Android Whatsapp. Even more so paying more than once.
it's quite "easy" to solve that problem - you as the person who wants to convince others to use, would pay up front for the app for them.
To the family member, it's free (of course, you do tell them you're paying). But when they find that it's good, they would also pay to recommend it to their friends.
> “A project of our size needs at least a few hundred million dollars per year to keep going”
They have 550M MAU, using a freemium model and assuming a 1% payment conversion, that's 5.5M monthly paying users. With a price ranging $1 to $10, that can be $66M ~ $660M ARR, at least they can try.
That envelope maths might explain why they're pinning their hopes on VC FOMO cash injections to explore more speculative revenue generation models.
1% conversion to paid at $120/year sounds high for a consumer-focused app particularly popular in developing countries whose competitors are free and whose competitive advantage is supposed to be that the app doesn't know who you are. And that's apparently less than they need to pay the bills, never mind justify their valuation.
"some" people are happy to do that. Some people just don't want to pay for software regardless of anything else.
I have friends who had switched to other messaging apps instead of paying WhatsApp 1€/year or whatever it was, and by any measure I live in a rich country and paying 1€/year for my friends would have been pretty much completely irrelevant economically.
This is part of the issue. Audience. Mass consumer does not know and/or does not care. If that is the case, the company can easily determine that Zoidberg approach of 'Why not both' is very rational, if annoying to people like me.
We live in a world where you can find almost any computer service for free. Not everyone is like lazy americans willing to take the credit card out at any road bump. They will find a service that does the same for free. I can barely convince my friends with that mindset to come to Telegram when they already majorly use Messenger. Not only do they need an incentive to switch to Telegram, adding a fee to use the platform would simply kill the app. There are many ways to monetize services that don't require users to pay just to join, and this is the way forward even though it's meeting resistance from companies, it will win in the long run. Don't fight it, work with it and learn to take advantage of it instead.
Charging for everyone will hamper network effects, chraging for poweruser features should still be fine. The should charge for the things that are actually costing them the money, like long term storage of big files
Targeted advertising and privacy don't mix. Context-based advertising is fine for the privacy. But it may not be fine if you don't like to be manipulated.
One of the great -- although I suspect inevitable -- sins of the early web was the "innovation" of tracking clicks on advertising. Ads had been around for over a century before that in other media, and the only real measure of success available to advertisers was "when I spend money on ads in this [magazine, newspaper, TV show, radio spot, billboard, …], sales appear to go up by this amount, compared to spending money on [other thing]." Selling ads based on the notion that the only effective web advertisement is the one that makes the viewer stop reading that article, right now, and drop everything to CLICK! RIGHT! THIS! MOMENT! was, in the light of all previous advertising history, absolutely bonkers.
I would imagine that it's, in part, because they want to allow anonymous communication for political dissidents and the like. It's hard to make an app that is resistant to nation state level spying. It's that much harder to implement an anonymous payment system on top of that.
I know Bitcoin and the like exist, but you're vastly increasing the attack surface to identify someone.
Today ads never come without tracking. This is the problem. And even without tracking ads are a kind of garbage I don't want anyway. So, the day I get ads in Telegram I'm leaving. At the same time I wouldn't mind a reasonable (~1$/month, I don't do anything heavy, text messaging only) subscription.
I'm not sure about this, if anything there seems to have been a few services recently (e.g. DuckDuckGo, Qwant) that are supported by ads (presumably with metrics on ad performance for advertisers) but without following you around the internet. They seem to be doing ok as businesses, and it seems a reasonable compromise to me.
I'm curious about how Telegram will decide what ads to show, how heavily it will try and personalize them; will the ads be relevant to the channel you are in or follow you around Telegram.
FWIW, personally, I like the idea of a choice of ads or paid subscription best.
I have stimulated many people to switch to Telegram because it is the best and all you have is to try it, realize that and motivate your friends to switch with you. Obviously many of these people will go with me once I find a better alternative. The situation probably is the same for many other people.
Nobody cares is an exaggeration, but correct spiritual point for the grandstanding a minority of HN users make about always leaving X or Y or never joining Z because of situations like you mentioned. Yet nothing actually changes in the real word because of how much of a niche minority these people are.
> Obviously many of these people will go with me once I find a better alternative.
People will go only if there's another service that's good enough and has enough user density. You may find the best privacy-oriented, ad-free messaging app, but if it's empty or if it's hard to use, it's essentially useless.
By this point, it's hard to compete with the behemoths like WhatsApp or Telegram and people will not care about this nearly as much as you do. So, no, it's not 'obvious' at all.
I have been told the same about Telegram just a couple of months ago.
Most of the people I know have less than 10 contacts they actually care about and communicate regularly and it is not hard to convince the most of them to install an app you would sincerely recommend.
You don't understand how hard is for a messaging app to gain traction. Telegram has been growing for years and years, and it offers some significant advantages over WhatsApp. Even with all this marketing and effort, I'd say only about 10% of my WhatsApp contacts are on Telegram. Now you want to get people to move to yet another app? For what? Why would they? Because no ads?
If a new app ever manages to become big (as in, Telegram-level big, let alone WhatsApp), it would take years of raising money and marketing. And how would they pay for that exactly? You think people pay a mensual/anual fee for a messaging apps when there are free alternatives? No, the answer is, again, ads. That or selling user data, which is much worse.
You're too focused on the tech, but you have no understanding of how business works.
The Whatsapp route is to get purchased by and subsidized by Facebook. There is no chance the antitrust authorities in the US and Europe will allow something like that to happen again.
While I would be happy to pay for it in principle, the value of Telegram to me is that is has provided a platform for many political dissidents - individuals and groups - who might otherwise be persecuted for their beliefs and activism, and denied a platform for learning and discussion.
I could be wrong but I believe this is a popular reason for Telegram's appeal.
How many of those would be comfortable trusting Telegram with payment details, rather than just a pseudonym?
I'm not sure why that would be a problem. Telegram could easily make bitcoin and/or cash a payment option like countless VPN providers have. No "real info" necessary.
Bitcoin and other crypto coins are very inaccessible. Even disregarding transaction fees, you can't really get bitcoin without giving your payment details to someone.
Yes, countless VPN providers do need your payment details. And that is a risk. The comfort in that risk however is that anyone with knowledge of your VPN payment still doesn't know what you did with that VPN. With a messaging app however, you are risking your entire online identity.
I guess one threat in that scenario is if some other competing service actually does succeed in their ads driven model, they can attract a lot more users, because it's free? But I have no idea about running a company this size tbh, just thinking out loud.
These startup social apps that run on a loss are heavily, intensely focused on user count as a KPI.
I wonder if that leads to them balking at the reality that once you start charging money you'll lose a % of your users (which should be normal and fine!)
This was in the news some months ago, they have backdoors for 1:1s that they use to comply with government agency and police data requests. Do go look it up.
This has not been found, that would be major news on mainstream channels. (Do go and cite sources.)
If you need some obscure news source for this, it's very unlikely to be true and unless you or a trusted friend of yours has reasonable expertise in the relevant field (reverse engineering or cryptography might be relevant, perhaps both depending on the type of backdoor) you can't rely on some controversial source being correct.
