A lot of services and products you use on the internet are free. Of course, the companies behind the services need to make money one way or another. Often times, they will show you ads or otherwise monetize your data. Other times, they just keep on drinking from the VC teat.
Both strategies set wrong incentives, and lead to poorer long-term outcomes for everyone involved.
You know what would be great? If we just paid for the services we use. This needs to start with companies not being afraid of charging their customers, and continue with customers not being put off to pay a couple of bucks a month for a product that brings them value.
Interestingly, within some categories it’s completely normal to pay. Video and audio streaming come to mind. While in others, it’s unheard of. I’m talking about social media, messaging apps, and to a certain degree, email. There’s also the news publishing industry, but let’s leave that for another post.
The main reason email is free is that Google fucked it all up by offering a good email service for free. Any other company that wanted to charge had a hard time, and a whole generation of humans grew up thinking email is a product that’s free in nature. It’s not. Luckily, this is slowly changing, with great providers like Fastmail and HEY charging for email, and people paying for it.
The reason social media and massaging apps are free is because of the network effect. These products only work if enough people use it, and a critical mass is easier to achieve if you give it away for free and then monetize it by showing ads, since now you have a shit ton of data. This is especially true for regions of the world with lower purchasing power. Charging an average person $5/month who lives in India might be impossible, while charging Indian businesses for ads is more realistic.
Now, I think there are two ways we can get rid of the ad-based revenue model while still enjoying social media apps.
First, an alternate world is conceivable where WhatsApp never got bought by Facebook, and they kept their $1/year revenue model. WhatsApp could have built a profitable, large business. Eventually, they could even have increased their prices for richer countries.
Second, and this is a more realistic scenario given our current quagmire with social media networks, companies should charge for extra features. This idea is not new, of course, but completely underutilized in social media and messaging apps.
There are already apps that do that: Signal lets you donate a monthly amount directly within the app, and shows a cute vanity badge next to your profile picture if you do so. Reddit lets you go premium, which hides all ads and gives you a monthly amount of Reddit coins that you can use to get awards for other users. Finally, Discord has a paid plan called Nitro, that gives you fun stuff like animated avatars or more emoji, but also more useful features like HD video and bigger file uploads. Twitter is experimenting with a premium tier called Twitter Blue, which, e.g., lets you undo a Tweet (even though they will still show you ads, for now).
It feels like more and more people want to pay for stuff to stop seeing ads, to get premium features, for vanity or simply to support a company that makes a great product. If you make it easy to pay and offer a mix of vanity and useful features, people will pay for it.
I hope that more apps start taking a page out of the book of these companies.