Facebook-owned messaging service WhatsApp announced that it’s ditching its $1 annual subscription fee earlier today, and instead will monetize through selling itself as a service for companies to communicate with their customers.
However, in the wake of the news, a number of people across the social sphere declared their surprise that there was even a subscription in place, while others simply said that they’d never had to pay an annual fee. So why was that?
@psawers @m4tt I also have never had to pay it, however, I also don’t use it that often.
— Matthew Keys (@MatthewKeysLive) January 18, 2016
Well, it turns out that whether you’ve been required to pay WhatsApp’s annual fee or not depends very much on when you joined the service, and even what country you live in.
Up until July 2013, WhatsApp charged iPhone users a one-time fee of $1 to download the app. However, then, the company brought iOS in line with Android and made the app free to download and use for the first year, followed by a $1 annual fee thereafter. However, as a goodwill gesture to those already using WhatsApp, it gave existing users lifetime access to the service. Even if someone changed their device, as long as they kept the same mobile number, they would never have to pay another cent.
The vast majority of WhatsApp’s 900 million-strong user base have signed up in the past couple of years, so today’s news that the $1 annual fee is being scrapped will likely benefit most people. However, if you were an early adopter, then you’ve already been enjoying free access to WhatsApp.
Elsewhere in the announcement today, WhatsApp co-founder Jan Koum also revealed another reason why it’s ditching the $1 fee across the board. Some people, particularly those in developing markets, don’t have credit cards and therefore aren’t physically able to pay the $1 fee. This is why WhatsApp was already waiving the $1 annual fee in several countries, including India, and this also helps explain why in the App Store description it says somewhat enigmatically that it “may” charge after the first year. Basically, some people paid and some didn’t.
By getting rid of the $1 fee, this not only allows WhatsApp to explore alternative and potentially more lucrative revenue streams such as corporate partnerships, however, it also brings consistency to its business model. Either everybody should pay the yearly $1 fee, or nobody should pay it. WhatsApp has opted for the latter.