On June 16, WhatsApp announced it will begin inserting advertisements into its Status feature—the content stream where users share text, photos, and videos that vanish after 24 hours. Soon, users will see sponsored posts while scrolling through these updates. On June 17, Amazon Prime Video revealed that 4 to 6 minutes of ads per hour will be added to its content from that day itself, bringing about a major change in the viewing experience of paying subscribers.
These developments come at a time when WhatsApp is facing competition from platforms like Telegram, Viber and Signal, which offer more privacy-focussed features and customisation, and Amazon Prime Video is dealing with the skyrocketing costs of producing and acquiring high-quality original content, while battling stiff competition. In addition, WhatsApp has not been able to generate significant revenue for its parent company Meta (compared to its valuation of $19 billion at the time of its acquisition) from its earlier attempts at monetising different features.
In an attempt to cash in on the amount of time that users spend on their platforms, WhatsApp’s and Prime Video’s pivot towards advertising highlights how user attention is now being perceived not just as engagement, but as a monetisable asset. The challenge lies in how they navigate the fine balance between revenue generation and user experience.
“Eyeballs is the baseline for revenue for any media platform because that is a marker of attention. WhatsApp and Prime Video are looking to monetise this attention with advertising. This can become a sustainable revenue stream if they continue to build on their user base and provide end-to-end solutions for brands,” says Hitesh Rajwani, CEO, Social Samosa.
WhatsApp’s and Amazon Prime Video’s move can be seen as part of a broader trend, which some call “enshittification” of the internet. Meaning, user-first platforms gradually become ad-first.
When WhatsApp launched in 2009, it charged users a $1 per year after free usage for the first year. The mantra of Founders Jan Koum and Brian Acton was: “No ads, no games, no gimmicks”. After Facebook (now Meta) acquired WhatsApp in 2014 for $19 billion, in 2016 it did away with subscription fees to gain more users. Which it did, very well. Industry experts say WhatsApp now has over 2.7 billion users globally, who spend an average of more than 30 mins on the platform.
Since 2014, WhatsApp's primary revenue stream has been its Business API, which allows medium and large businesses to communicate with customers. Per-message fees from subscribing businesses, in a tiered pricing model, generates revenue for WhatsApp. The platform then introduced its Business app, via which small enterprises can connect with customers, and a peer-to-peer payment feature in India and Brazil.
However, these features have struggled to scale globally or generate substantial revenue. Monetising private messages without compromising user trust has proven to be difficult. Click-to-WhatsApp Ads had reached a $10-billion revenue run-rate globally by 2023. However, earnings have subsequently fallen. In 2024, WhatsApp generated about $1.7 billion in global revenue, with its ‘paid messaging’ business reportedly passing a $1 billion run rate as of late 2024; its contribution to Meta's overall revenue is less than 1 percent.
Globally, Prime Video had 245 million users in 2023, with projections to reach 290 million in 2024 (about 72.87 million users in India). It had leaned on subscription plans bundled with Amazon Prime, and provided ad-free content streaming. But as competition has heated up from the likes of like Netflix and Disney+, and cost of producing content has surged, subscription fees are not proving to be enough. Prime Video's content spend has grown from $11 billion in 2020 to $18.9 billion in 2023, and was projected to hit $21.5 billion in 2024. Adding advertisements will allow Amazon to offset production costs while keeping subscription fees stable.
“To continue investing in compelling content and keep increasing that investment over a long period of time, Prime Video shows and movies in India now include limited advertisements. We aim to have fewer ads than linear TV and other streaming TV providers,” said a company spokesperson in an email to Forbes India.
Ashish Pherwani, leader, Media & Entertainment Sector, EY India, says that customer lifetime value (CLTV) is now the key measure, and not just the number of customers or the amount of time they spend on the platform. CLTV, he explains, is “the net margin from advertising, subscription and transaction revenues, minus the cost of customer acquisition, tech, content, and other heads.” A positive CLTV—not always the easiest to achieve—is the end goal for all digital media companies, he adds.
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Marketers make a beeline
Industry analysts estimate that ads on WhatsApp could generate over $10 billion in annual revenue within a few years, thus highlighting what Meta expects from this move.
“Unlike other social media platforms where content consumption takes centre stage, WhatsApp users indulge in conversations. This gives brands the opportunity to initiate deeper engagement with consumers,” says Rajwani. Over the years the platform has built an ecosystem—it includes Business API, Catalog, Payments or Click-to-WhatsApp Ads—and “there is a high possibility of designing closed loops with fewer customers dropping out. Advertising on Facebook and YouTube has matured; the opportunities with WhatsApp are fresh and largely untapped, which make it a must-try for brands.”
“Prime Video has started testing Shoppable Ads, which leads users to brand-owned landing pages or Amazon’s website. That’s a bet brands with digital-first storefronts would like to take. Amazon Advertising has been effective for quite a few brands and Prime Video can be a good window to tap high-intent users,” adds Rajwani.
According to Trade Desk’s most recent report, ‘Why the Open Internet is the New Premium’, nearly eight in 10 users have increased their time on the open internet, with 76 percent expecting this trend to continue. The open internet—which includes over-the-top (OTT) and connected TV (CTV), music streaming, online gaming, and news/websites—reaches 640 million users in India.
“The shift to the open internet represents a pivotal moment for marketers,” says Tejinder Gill, general manager, India, The Trade Desk. “As more consumers engage with premium content here, marketers can reach highly attentive audiences at scale. The transition is poised to boost ad spend on the open internet.”
For better or for worse?
The biggest worry however remains data privacy and user experience. WhatsApp has assured users that “private chats will remain private”. So far social media experts don’t expect an interruption to daily time spent on the application, since ads will be in the ‘Updates’ tab. “Hence, migration to other platforms would be a far-fetched thought at the moment,” says Rajwani. “Meta has clarified that ads won’t be served on the basis of conversations, since they are encrypted.”
The ads would be served on the basis of demographics, location, language and interactions with Channels or Ads on other Meta platforms. Rajwani feels that one significant behavioural change that WhatsApp would want, and the push towards Channels may enable it, “is user time spent in following channels from Creators to Businesses that would, in turn, bring more relevance to offerings such as promoted channels or paid subscriptions to channels.”
For Prime Video, it is expected that users are already accustomed to existing models of rivals such as JioHotstar and would not mind interruptions caused by ads. If they do mind, viewers can pay an additional Rs 129 per month or Rs 699 per year to their existing Prime membership for an ad-free experience. This would be similar to platforms such as Mubi and Apple TV, where subscribers pay significantly more for premium, ad-free content.