WhatsApp is doing away with its annual subscription of $1 and will look to B2C services for revenue generation, co-founder and CEO Jan Koum announced at the DLD conference in Munich.
Instead of charging users a fee, the firm will focus on “commercial participation” for monetisation, which involves improving communication between consumers and businesses. Examples of this include airlines sending notifications of flight delays, banks asking users to confirm their identity following unusual card activity and making restaurant reservations.
WhatApp wants to make “communication with businesses” just as easy for users as it has done with family and friends, said Koum. However, the strategy is in its very early stages and for now the company is just communicating its intentions, he added, clarifying that the app maker does not intend to put ads into the app, and will work to prevent spam.
He explained that thanks to Facebook, which bought the company two years ago, WhatsApp has been able to focus on growth and making its product work better rather than work on a subscription model, and decided to do away with it completely because “it didn’t work that well.”
“It’s hard for people to pay, especially if they don’t have credit cards or bank accounts. We don’t want them to think their communication with the world will be cut off because of that, as it creates anxiety,” he said.
He also said it was able to leverage Facebook’s infrastructure to launch voice calls, which meant they didn’t have to buy and manage thousands of servers.
However, he said the company still operates like a start-up and has maintained its independence by working in a separate building from Facebook and continues to build the product in any way it wants.
When asked if WhatsApp would introduce video calling, Koum’s response was “we’ll see, maybe” adding he did not want to talk about any service until it was certain as the company raised expectations around voice calls only to experience delays in its launch.
Regarding the controversy in Brazil last month over giving the government access to WhatsApp messages, Koum said “a conversation about a back door is not productive as we will not do that” as it creates less security and “bad guys will find them and break through them”.
He added that WhatsApp is rolling out encryption for all messages sent via the app, and when the process is complete “it will be the largest end-to-end installation in history given our user base”.
Last month the company was also in the news for blocking links to Telegram, a rival messaging app.