Telegram has to figure out to cover roughly $700 million it owes creditors by the end of April, WSJ reports.
Why It Matters: Despite adding tens of millions of users this year, the messaging platform and social-media service has racked up quite a bit of debt. It’s a consequence of scaling equipment and bandwidth expenses from years without trying to generate revenue.
- Telegram is a rare challenger to Facebook — it’s on pace to hit one billion active monthly users by the end of 2022. It currently has 550 million today.
The Big Picture: Messaging apps are great, and their rising popularity supports that. But they’re not exactly clear-cut, revenue-generating business models.
- WhatsApp (Facebook) still isn’t revenue-generating.
- Signal is donation-based and run by a nonprofit.
- Discord made $130 million in revenue last year thanks to premium subscriptions but is still unable to turn a profit.
The Potential Solution: “To pay the bills, [owner Pavel] Durov is issuing investors $1 billion to $1.5 billion of company debt, with the promise of discounted equity if the company eventually goes public, the people briefed on the plans said. He has also announced plans to start selling ads in public Telegram channels as soon as later this year, as well as offering other premium services for businesses and users.”
- Telegram has to show potential advertisers its audience is broad. But a large chunk of far-right groups and white supremacists have migrated to the platform after being banned from others.
- Durov and Co. also have to keep Apple and Google satisfied so as not to disrupt their distribution on App Stores. Telegram has taken heat for “threats of violence and coordination of illicit activities such as weapons and drug sales.”
In my opinion, monetizing messaging platforms will be a tall task and will most likely fall short of other types of content or social media platforms. Messaging is inherently intimate and private, making the end consumer more sensitive to externally inserted content.
The best example of well-executed advertisements in “messaging” is what Google does with Gmail. Even so, the monetization value of Gmail ads are very low compared to Instagram or Youtube ads.
I believe that messaging naturally lives as an ecosystem protector, like with Apple iMessage. Apple does not “monetize” iMessage, but instead uses it as a tool to keep people “trapped” in their ecosystem where they monetize users in different ways (App Store, etc).