> The network effects would have not worked, because there are many people that can not afford $10 a year. These people would have used an alternative and at the end everyone would have used that alternative (because network effects).

There must be techniques to get around that. Maybe grant free or discounted accounts if you're connected with enough subscribers? Allow subscribers to gift free memberships to their friends? Maybe have a long "initial trial" (e.g. totally free for 1 year)?

WhatsApp and Facebook have many users in the developing world who could not afford a subscription unless the price was extremely low.

> WhatsApp and Facebook have many users in the developing world who could not afford a subscription unless the price was extremely low.

I would make sense to me to scale the price to the market. Make it $5 in the US and 5 rupees in India.

They did. Before it all went free

Don't ad earnings scale accordingly?

Salaries in the developing world are low, but they're not that low. Average salary in Brazil is $670/m. $10 per year does not seem overly onerous.

Median salary in India (WhatsApp's largest market) is $600-$1500 per year.

that seems like a wide median to me.

Simply because there's no one objective way to calculate that number. How do you define the total labor force? Do you count seasonal workers? Part-time workers? People who are unemployed but otherwise working age?

thanks for the clarification.

If there's cheaper/free alternatives?

$80 a year seems a lot for someone on $65k/y for an SMS replacement.

Why not just make it $10/mo or ads?

Because the people who are most valuable to show ads to are also the most likely to be be willing to pay $10/mo to not see ads.

I pay for Spotify and Google Play. If either one of them starts showing me ads, they're gone. It's not me I'm worried about at this point. It's my kids.

Some are likely far over that threshold. However, I doubt everyone willing to pay 10$/month is worth more on average.

Facebook makes $7 per month per user in the US and Canada. So, it's likely fairly close though.

But it doesn't matter if you lose money on those people. The $10/month easily carries all costs even if 0.1% of users pay and the rest gains them zero. (At least, back when I did the math in ~2015, when they were probably a bit smaller than they are now.)

Facebook alone makes $23 per user (from US/Canada) per month so it probably should rather be $50 than $10 per month.

It's per quarter I think.

I believe that was one of the questions Zuck got asked in Congress - why not make paying for FB (and it's subsidiaries) optional in exchange for an ad free, non-data harvesting experience. I get it that many people want the service free and that expense needs to be recouped, but it would be nice to have the option. Perhaps it should even be a legal requirement to have the option.

I think YouTube has something like this (in the US) where you can pay monthly for an ad-free experience?

That makes no sense. People who can't afford $10 a year are not randomly distributed through the world. You can have a North America network just fine.