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The major messaging apps are all free, so what's in it?
In the last 24 hours, I have written more than 100 WhatsApp messages.
None of them were very exciting. I made plans with my family, discussed work projects with colleagues, and exchanged news and gossip with friends.
Maybe I need to up my game, but even my most annoying messages were encrypted by default and used WhatsApp's powerful computer servers, hosted in various data centers around the world.
It's not a cheap operation, and yet neither I nor any of the people I spoke with yesterday have ever spent any money to use it. The platform has nearly three billion users worldwide.
So how does WhatsApp – or zapzap, as it's called in Brazil – make money?
Certainly, it helps that WhatsApp has a huge parent company behind it – Meta, which also owns Facebook and Instagram.
Individual and personal WhatsApp accounts like mine are free because Whatsapp makes money from business customers wanting to communicate with users like me.
Since last year, businesses have been able to create free channels on Whatsapp, so they can send messages that will be read by everyone who chooses to subscribe.
But what they pay extra for is access to interactions with individual customers through the app, both conversational and transactional.
The UK is relatively in its infancy here, but in the Indian city of Bangalore for example, you can now buy a bus ticket and choose your seat, all via Whatsapp.
“Our vision, if we do all of this right, is a business and a customer should be able to do things correctly in an email thread,” says Nikila Srinivasan, vice president of business messaging at Meta.
“That means if you want to book a ticket, if you want to initiate a return, if you want to make a payment, you should be able to do that without ever leaving your chat thread. And then go right back to all the other conversations in your life.
Businesses can also now choose to pay for a link that launches a new WhatsApp chat directly from an online ad on Facebook or Instagram to a personal account. Ms. Srinivasan tells me it’s now worth “several billions of dollars” to the tech giant.
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Meta's Nikila Srinivasan says the goal is for businesses to increasingly communicate with their customers via Whatsapp
Other messaging apps have taken different paths.
Signal, a platform renowned for its industry-standard message security protocols, is a non-profit organization. She claims to have never taken money from investors (unlike the Telegram application, which relies on them).
Instead, it runs on donations, which include a $50m (£38m) cash injection from Brian Acton, one of WhatsApp's co-founders, in 2018.
“Our goal is to get as close as possible to full support from small donors, relying on a large number of modest contributions from people who care about Signal,” wrote its president Meredith Whittaker in a blog post last year last.
Discord, a messaging app widely used by young gamers, has a freemium model: registration is free, but additional features, including access to games, require a fee. It also offers a paid subscription called Nitro, with benefits like high-quality video streaming and personalized emojis, for a monthly subscription of $9.99.
Snap, the company behind Snapchat, combines several of these models. It runs ads, has 11 million paying subscribers (as of August 2024), and also sells augmented reality glasses called Snapchat Spectacles.
And it still has one more trick up its sleeve: according to the Forbes site, between 2016 and 2023, the company earned nearly $300 million thanks to interest alone. But Snap's main source of revenue is advertising, which brings in more than $4 billion a year.
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British company Element charges governments and large organizations to use its secure messaging system. Its customers use its technology but run it themselves, on their own private servers. The 10-year-old company has “double-digit turnover” and is “close to profitability,” co-founder Matthew Hodgson tells me.
He believes that the most popular business model for messaging apps remains the perennial digital favorite: advertising.
“Basically (many messaging platforms) sell ads by monitoring what people are doing, who they're talking to, and then targeting them with the best ads,” he says.
The idea is that even if encryption and anonymity are in place, apps don't need to see the actual content of shared messages to learn about their users, and they can then use that data to sell products. advertisements.
“It's the old story: if you, the user, aren't paying, then chances are you are the product,” Hodgson adds.
