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The Future Isn't Advertising: How Viber Tweaked Its Revenue Model With Its Focus on Privacy

The app is also launching a payments platform soon.
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Many of us use messaging apps to communicate with loved ones, friends, work associates, and even strangers. They’ve become so indispensable to everyday life that we hardly give a second thought about the kind of information that we’re sending out. Privacy is almost an afterthought. 

But at least one company that takes privacy seriously—enough to build its whole business strategy around it—is Viber. Google the “best messaging apps for privacy” and Viber is almost always in the top tier. It’s a strategy that seems to be paying off as it marks its 10th anniversary this year. 

When Viber launched in 2010, it was intended to be a platform that provided free calls to iPhone users. A decade later, the company has grown to offer a suite of services that has become indispensable to many people worldwide. According to Statista, Viber currently has about 1.17 billion unique users in the world as of March 2020. In the Philippines, it’s no secret that Viber is one of the most popular messaging apps, with around 40 million users—or about one in three Filipinos—as of 2019. 

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User privacy above all else

But behind this tremendous growth is the company’s commitment to safeguard users’ privacy. In a call with journalists on Wednesday (November 25), Rakuten Viber CEO Djamel Agaoua underscored how important it is for the company to put users’ privacy over revenues and profits by using Facebook as an example. 

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“Facebook’s (business) model is 100 percent ads,” he said. “And we’re seeing Facebook audience declining, especially in the West. We’re seeing a pushback from people who do not want their data collected. 

“We made this choice (to focus on privacy and security) as citizens of the world and not as a business,” he added.

Agaoua pointed out how messages sent through Viber are protected by end-to-end encryption, which essentially this means that no one else—not advertisers, other users and not even Viber itself—has access to your messages, voice calls, and video calls. While this has certainly benefited users, the tradeoff is that the company cannot make money by selling users’ personal information and messaging habits to advertisers, which Facebook does. It is a tradeoff that Viber says it is happy to make.

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“We are proud not to have targeting capabilities as our competitors,” Agaoua said. “We don’t want to sell (our data).”

Business model

With that opportunity to make money out of the picture, Rakuten Viber says it was forced to get creative with its revenue strategy. The company CEO said about 40 to 45 percent of its revenue now comes from its Community feature, where brands pay to create groups of nearly unlimited members (Viber says up to one billion) for it to interact directly with consumers. 

“We’ve created the ability for brands to communicate directly to users,” Agaoua said. “We see the direct-to-consumer model as a huge trend happening in the world today.”

Another 30 percent of revenues come from services bought by the users themselves, which includes paid calls to international mobile and landline numbers worldwide, as well as in-app purchases like stickers.

Rakuten Viber said it only gets about 20 percent of revenues from advertising. 

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“Our commitment to privacy is real,” Agaoua said. “We decided not to build our future on just advertising.”

Moving forward, Rakuten Viber has revealed plans to move into the fintech space with the launch of an in-app payments platform called Chatbot Payments in partnership with Google Pay and Apple Pay. The feature enables users to purchase the products and services of the merchants securely and accept payments directly through the app.

The company said it will roll out the feature “very soon” in the Philippines through a partnership with Globe. It is also in talks with other mobile wallets for the payments feature.

 

 

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About The Author
Paul John Caña
Associate Editor, Esquire Philippines
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