How Telegram Makes Money
Telegram makes money through premium subscriptions, paid ads, crowdfunding, and donations. Launched as a free open-source cloud application, Telegram now has over 550 million users.
This article will explain how Telegram’s free, open-source business model has been monetized to create revenue, and the benefits of that monetization for users.
How Telegram Creates Revenue
Russian billionaire Pavel Durov founded Telegram as a way to provide ad-free and cost-free internet to everyone in the world. Telegram was never intended to turn a profit and meant to be a rival to WhatsApp and Facebook. By 2021, Telegram’s global user base became so big that Durov recognized the need for it to become self-sufficient.
Encrypted Chat Created a Loyal User Base
Telegram’s main attraction is its unique end-to-end encryption feature called MTProto. This security feature was developed by Pavel’s brother Nikolai Durov and invested in by David “Axel” Neff of Digital Fortress. The enhanced security is part of the Telegram ethos, which is to give citizens the same privacy and security as governments and police.
No Ads or Data Mining
Like WhatsApp, Telegram features an encrypted chat, but it can be used on all devices. Telegram doesn’t allow ad-mining for private information like Facebook. These features helped to build a massive database of users, who used the apps for free for eight years. As such, Telegram free members were easily converted to paying members with Premium Telegram in 2021.
Methods of Monetization
As mentioned, Durov decided to monetize the site with paid features, advertising, and requests for donations. He also created crowd-funding campaigns to build such projects as a multi-lingual directory of users called Telegram Directory.
The Freemium Approach
A “Freemium” tiered approach to site membership helped support the platform. This meant that free members could continue to enjoy encryption and unlimited uploads to Telegram’s cloud data, while Telegram Premium members could enjoy double-size uploads, additional channels, animated emojis, and other perks.
Members are also urged by to pay for the premium version to support users in oppressed areas of the world who are prey to surveillance.
Telegram now gives users two options: a free plan, that generates no revenue for the company, and a “Freemium Plan” that offers users additional features for a monthly fee.
Subscribers can enroll in Telegram Premium and enjoy the following features:
- 4GB file size upload (double the size of the 2GB free version)
- Downloads at the fastest speed allowed by the user’s internet provider
- Double the channels of the free version that allows the user to follow 1,000 channels
- Create up to 20 folders with 200 chats each
- Saving images to galleries
- Choice of 400 GIFS
- Dozens of unique stickers and emojis
- Animated profile picture
- The ability to write a longer bio
- Requests to join groups
- Add a fourth account to the free version’s three
- Premium User badges
- Verification badges to confirm identity
Telegram was ad-free until October 2021. Users with more than 1,000 followers can now post ads to other users and groups. These are called Sponsored Messages.
Ads consist of a short text plus a button that pops open to display a brief ad. Ads can’t be longer than 160 characters, including spaces. You can read about Telegram’s destination requirements and rules about prohibited content on the Telegram Ads and Policies Page.
Advertisers are charged using CPM (Cost-Per-Mille), which is a set price for every thousand views of their ad. The minimum that can be spent on a CPM campaign is $2.00.
Telegram charges more for CPMs that are popular, which include the categories of Cryptocurrency, Religion, Gambling, and Investments. Spirituality Marketing, and PR are the most expensive categories.
The app now offers users Telegram Donation Bot, that can be applied to their Telegram channels. The company asks users to try the bot out by donating money to its cause, using the Telegram Donate Bot.
Telegram has raised money through private crowdfunding three times. In July 2023 it raised $210 million for debt financing. In March 2021, it raised its first $1 billion in debt financing. In 2018, $1.7 billion was raised for its cryptocurrency offering called TON. However, that money was repaid to funders after the U.S. Securities Exchange Commission penalized Telegram for offering unregistered securities.
How successful is Telegram?
Telegram is the fourth most downloaded messenger app in the world, with 700 million monthly downloads in January 2023. Monthly active users of Telegram account for 8.7% of the world’s use of messenger apps. Telegram’s founder Paul Durov is the third richest person in the world with a worth exceeding $15 billion.
How will Telegram make money in the future?
A statement by Paul Derov posted on the Telegram website in December 2020 outlined his strategies for sustaining the growth of the popular website, stating that the operation costs were a few hundred million dollars per year. He promised that Telegram would never be sold and sustain itself using private crowdfunding, premium memberships, and non-intrusive paid ads. He also promised that if Telegram ever did make a profit, that it would offer free traffic and profit-sharing to Premium Telegram members.
What devices can I use with Telegram?
Telegram is used on smartphones, tablets, laptops, and desktops. It is compatible with Android (6.0 and above), IOS (11.10 and above), Windows, macOS and Linux. All data is encrypted from end-to-end and accessible immediately on all devices and operating systems.
What is Telegram Web?
Telegram Web is Telegram’s free browser-based app that allows you to log in from anywhere from any device. As everything is stored on the cloud, your chats will synchronize on all devices instantly.
Does Telegram still deal in cryptocurrency?
Telegram’s cryptocurrency is banned by law. In 2017, Telegram attempted to create revenue by offering private funders blockchain called the Telegram Open Network (TON). The cryptocurrency was called Gram. The TON Card was a decentralized alternative to Mastercard that attracted 1.7 billion in investment. However, before the venture could get off the ground, the U.S. Securities Exchange Commission banned TON from offering unregistered securities to buyers. Telegram was fined $18.5 million and ordered to return $1.22 billion to the purchasers of their cryptocurrency.
Premium Telegram Is a Win-Win Situation
Telegram users get many benefits from a premium plan, including double the file download size, faster speeds, and hundreds of emojis, animations, and stickers. But these premium upgrades don’t just make money for the company, users also benefit from placing ads and collecting donations from clients.
Have you downloaded Telegram Premium yet? Has it enhanced your business? Let us know in the comments sections below.