The cost of maintaining Telegram as a service. Messenger economics

Many people consider Telegram a messenger, they use it as an advanced version of WhatsApp. I do not share this opinion, since Telegram incorporates the properties of both a messenger and a social network in which you can share content, communicate and maintain contact with an unlimited number of people. We can safely say that Telegram is a tool of another generation, it has replaced the usual messengers and has become a phenomenon without any discounts. In January 2021, the Telegram audience exceeded 500 million people, it is used all over the world. Somewhere they try to ban Telegram, somewhere, on the contrary, they welcome it. The main contributor to the popularity of Telegram was Russia, as the state pretended to want to block the messenger, but never made a real attempt to do so. I can't remember such a large and expensive advertising campaign for another service.

The political strife in America has alienated many people from Facebook, Twitter, Instagram, and an almost unknown Twitter clone called Parler died a heroic death. People were looking for a convenient tool where they could express their thoughts, many discovered Telegram. Facebook underestimated how users perceive their data. For many years, WhatsApp data was transferred to Facebook and used for various purposes, including advertising, a person turned into a product for corporations. The change in WhatsApp's user agreement highlighted this problem, it began to be talked about publicly, and many people decided that they were not a product for Facebook to sell, went in search of another tool and found Telegram. Pavel Durov mentioned that in 72 hours Telegram got 25 million users, a record without any discounts, and both Facebook and the censorship that was introduced in American social networks should be thanked for it.

We can safely say that 2021 is becoming amazing for Telegram, the messenger is already being blocked in the United States by initiative citizens, but these are just flowers, the main events are yet to come. Many argue that Telegram only benefits from this situation, gets tens of millions of users from nowhere, does not spend money on attracting them. A fabulous situation that you can and should rejoice in, but in reality everything is not so beautiful. The reason is that each user means additional costs that are dead weight on Telegram. An audience of 500 million people is a notable political force in our world, but since its launch in 2013, Telegram has not brought its owner a penny. This business only eats up millions of dollars every month and looks like a charity project, but can it be? I doubt it.

Let's try to figure out together how much the content of Telegram costs, how expensive the project is, and where the money for it came from. Everyone can draw their own conclusions.

You need to start with an assessment of how Telegram has developed, how its audience has changed. Let's look at the graph.

The cost of maintaining Telegram as a service. Messenger economics

We can say that over the past year Telegram has accelerated, the growth of the audience of 200 million users can be considered a record. But by January 2022, Telegram planned to reach an audience of a billion users, such a forecast was made in 2018, when Pavel Durov was trying to launch his cryptocurrency. The plan looks realistic. To evaluate Telegram in the context of other social networks and messengers, let's look at the statistics (October 2020, as you understand, everything has already changed noticeably).

The cost of maintaining Telegram as a service. Messenger economics

Huge audience, constant and explosive growth. Let's evaluate how much it costs to maintain such a colossus and what the money is spent on. Since Telegram is not a public company, we can focus on what Pavel Durov, who created the messenger, said at different times.

The first interview that may be of interest to us dates back to 2015. It originally appeared in the American edition of the Daily Dot, but today the page with this text leads nowhere, the interview has disappeared. Here is the link.

It is extremely difficult to destroy something on the network, so I suggest that you familiarize yourself with a couple of points told in the interview. In particular, Pavel Durov said that in 2015, a million dollars a month was spent on maintaining the messenger. He spent his own money on the messenger, which he received from the sale of a share in the VKontakte social network. And here is his direct speech: “Now we are unstable, we are spending my personal funds. We want the company to be able to cover salaries in the future, because otherwise it's not fair. And I agree that this is where we are going, what we will eventually do, come up with a sustainable business model. I think we will start experimenting with this soon. This will not include paid features, subscriptions, or advertising. Telegram will always be free for the user. Our monetization will most likely include a third party platform and revenue sharing.”

Or this passage: “We are like non-profit organizations in that we also want to spend everything we earn. At the same time, we want to provide for ourselves. Therefore, an important question that users ask us is: “Great product, free, I love it, but what happens in a year, two years, five years, when you gain more popularity and costs increase?”.

When WhatsApp and Viber reached this point, they had to sell out. Their expenses were too high, and they did not find a way to monetize. WhatsApp had a subscription, but if you look at their results in 2014, they made $25M and spent $280M. It's not a sustainable model at all.

We don't want to burn money forever, and we don't want to earn more than we can spend. We want to earn exactly as much as we need for equipment, traffic and salaries. Our team includes the best developers in the world. Some of them were the best on VKontakte, and they followed me to Telegram. They received offers from Facebook, Google. We cannot motivate them with options because it is not a private company held for sale. So we have to pay them competitive salaries, otherwise we wouldn't have developers."

What does Telegram spend money on? This is a development team, office expenses and other small things, since these expenses are minuscule compared to the cost of traffic and servers to service Telegram. It is not possible to extrapolate 2015 spending to date, as the average Telegram user of that time and 2021 are very different. The reason is the popularity of the messenger and the fact that it allows you to create public channels that distribute information, and often this is not just text, but photos, videos, voice messages. The same is true for users. I do not have statistics on Telegram user traffic in 2015, but it is possible to see that for Russian users in January 2020 and January 2021, data from one of the Big Three operators. In January 2020, the average amount of data transferred (only mobile data, Wi-Fi is not taken into account, which gives a large error, real data is higher) was 800 MB. In January 2021, we are seeing an increase to 1.4 GB. It is possible to draw conclusions from these data for Russia as a whole, but in other countries the consumption profile is very different.

It is also worth considering that the operator sees data only on his own network. If a person uses two smartphones, then the traffic is multiple times higher, it is duplicated on each device! Here is my data from Telegram, it is above average for Russia (subscription to a dozen channels, active photo sharing).

The cost of maintaining Telegram as a service. Messenger economics  The cost of maintaining Telegram as a service. Economics of the messenger

Look at how much data you are transferring, I think the statistics will surprise you. The only conclusion that can be drawn on the knee sounds extremely simple: today in Telegram the amount of data per user per month is a significant amount and is very different from what we saw in 2015. This is also supported by the fact that people annually consume more and more mobile traffic.

It is clear that Russia is noticeably distinguished by the cheapness of mobile Internet, for example, in India, the picture for the user will be completely different. But there, people also have Wi-Fi, they are no less actively consuming a variety of content. For Telegram, it doesn't really matter how you access the app, over Wi-Fi or over a cellular network. For the service, it is important how much data you transfer, as well as the fact that this data must be stored on servers, as well as pay for traffic to them. The lion's share of Telegram's expenses today are servers that must ensure the operation of the application, and it is also desirable to be located in different countries of the world in order to ensure the best connectivity for the service.

In 2018, figures appear in the Gram cryptocurrency investor prospectus that show how the business of Telegram has changed. In particular, for 2017, the figure of expenses is $70 million, of which $62 million was spent on equipment, traffic, servers and user verification (yes, those same SMS messages). Interestingly, the prospectus also provides a cost projection: 2018 - $100 million, 2019 - $130 million, 2020 - $170 million.

Taking into account that Telegram planned to reach an audience of one billion users by 2022, the costs can be assessed as real and built on the basis of the growth model that was laid in the company. In 2018, no one could have predicted a pandemic, changes in the cost of storing information in data centers, and an increase in the cost of traffic for large clients. We can safely base a growth of 20% on the figures that Telegram cited in 2018 for the past year and the current period. Even according to the most conservative estimates, in 2020 the company's expenses amounted to more than $200 million, while the company did not earn a single penny from its service. Even if you add up all the numbers that Telegram cited and consider them as a minimum cost estimate, it turns out that at the end of 2020, $600 million was spent on the service. Given an audience of 500 million people, this is an excellent result that is undeniable.

In December 2020, Pavel Durov announced for the first time that paid features would appear in Telegram. In the messenger, nothing will change for users, Telegram will remain free for them. Also, users will not see ads in their messages, which is often annoying and repulsive. It is planned to raise money through advanced features, as well as those who use Telegram for business. No specifics were announced, but Durov repeated that there was no talk of selling the company or a stake in it.

For many years, Durov has been building the image of a person who fights for people's rights, creates a tool that protects privacy, and does not monitor his users. The fact is that Telegram stores everything you send through it - messages, files, videos and photos. For the user, this is exactly the same black box as other services, you do not know what is happening inside it, and you can only believe the words of Pavel Durov. Faith is an ephemeral thing, it can be quickly destroyed.

Since 2013, Telegram, according to Durov, lives exclusively on his money. From the sale of the share of VKontakte, Pavel could receive from 300 to 480 million dollars, estimates vary greatly. But even if we take the upper limit, Telegram's expenses have already exceeded this amount. In 2018, an ICO was held for the Gram cryptocurrency, in a couple of rounds they raised $1.7 billion. But the American regulator at the end of 2019 banned the release of Gram, the money had to be returned and paid to American investors 10% on top. Interestingly, $470 million of the funds raised were spent on the development of the blockchain platform, as well as maintaining the work of Telegram.

In May 2020, Gram investors were offered a loan agreement, according to which the company is obliged to return all the money attracted by May 1, 2021 and pay 10% for the year of their use (valid from May 1, 2020 to April 30, 2021). Or return 72% of the amount, but then the rate will be 52.7%.

In January 2021, there was a rumor that Durov was offered to sell from 5 to 10% of the company with a total Telegram valuation of $30 billion. But Durov rejected the offer, and all previous statements clearly indicate that the company is not for sale. Agree that this looks at least strange and surprising, because Telegram is a business that eats up hundreds of millions of dollars every year. And they need to be attracted somewhere, charity cannot continue indefinitely. The issue of monetization of the service is acute, but even if Telegram launches such monetization tomorrow, it will not be able to raise sufficient funds to maintain the work, the costs are already greater than the potential revenue.

Against this background, there are not so many ways to solve the problem, but this is if we talk about the business component. I think that we will see a very interesting move from Pavel Durov when he uses his signature feature - the protection of people and their personal data. No mandatory payments, but the collection of data in support of Telegram, the ability to get a “tick” in front of the name that you donated some money. This is a social story that can support the service. It is also a great story to show that Telegram is independent, supported by its users, there is no one behind it. At the same time, my opinion remains unchanged that Telegram was created as an intelligence tool, and the tool is successful, the whole legend around the service is built very correctly. As well as the fact that Telegram has not been making money for many years, this issue simply did not arise before the service. It is easy to believe in the altruism of Pavel Durov, since this is part of his image. But IR MINI DOME Network Camera (DS-2CD2522FWD-IS) I repeat that Telegram is a black box for everyone outside it, and no one knows what is happening inside, what data is stored and how, where it is transferred, and so on. Someone may consider this a conspiracy theory, but all indirect signs point to the same thing. The clumsy attempts to block Telegram in Russia looked like a successful PR campaign. When engineers offered 100% ways to "kill" the service, their advice was simply ignored, which paints the situation in a completely different light.

But if we put aside politics and who actually created Telegram and why, we can say that in the public field the company needs to solve one simple question - to show that it is independent and receives money for its existence from "pure » source. Collecting users' money is ideal for this, especially since among such payments it is easy to hide funding from various government institutions.

The cost of maintaining Telegram as a service. Messenger economics

Many people consider Telegram a messenger, they use it as an advanced version of WhatsApp. I do not share this opinion, since Telegram incorporates the properties of both a messenger and a social network in which you can share content, communicate and maintain contact with an unlimited number of people. We can safely say that Telegram is a tool of another generation, it has replaced the usual messengers and has become a phenomenon without any discounts. In January 2021, the Telegram audience exceeded 500 million people, it is used all over the world. Somewhere they try to ban Telegram, somewhere, on the contrary, they welcome it. The main contributor to the popularity of Telegram was Russia, as the state pretended to want to block the messenger, but never made a real attempt to do so. I can't remember such a large and expensive advertising campaign for another service.

The political strife in America has alienated many people from Facebook, Twitter, Instagram, and an almost unknown Twitter clone called Parler died a heroic death. People were looking for a convenient tool where they could express their thoughts, many discovered Telegram. Facebook underestimated how users perceive their data. For many years, WhatsApp data was transferred to Facebook and used for various purposes, including advertising, a person turned into a product for corporations. The change in WhatsApp's user agreement highlighted this problem, it began to be talked about publicly, and many people decided that they were not a product for Facebook to sell, went in search of another tool and found Telegram. Pavel Durov mentioned that in 72 hours Telegram got 25 million users, a record without any discounts, and both Facebook and the censorship that was introduced in American social networks should be thanked for it.

We can safely say that 2021 is becoming amazing for Telegram, the messenger is already being blocked in the United States by initiative citizens, but these are just flowers, the main events are yet to come. Many argue that Telegram only benefits from this situation, gets tens of millions of users from nowhere, does not spend money on attracting them. A fabulous situation that you can and should rejoice in, but in reality everything is not so beautiful. The reason is that each user means additional costs that are dead weight on Telegram. An audience of 500 million people is a notable political force in our world, but since its launch in 2013, Telegram has not brought its owner a penny. This business only eats up millions of dollars every month and looks like a charity project, but can it be? I doubt it.

Let's try to figure out together how much the content of Telegram costs, how expensive the project is, and where the money for it came from. Everyone can draw their own conclusions.

You need to start with an assessment of how Telegram has developed, how its audience has changed. Let's look at the graph.

The cost of maintaining Telegram as a service. Messenger economics

We can say that over the past year Telegram has accelerated, the growth of the audience of 200 million users can be considered a record. But by January 2022, Telegram planned to reach an audience of a billion users, such a forecast was made in 2018, when Pavel Durov was trying to launch his cryptocurrency. The plan looks realistic. To evaluate Telegram in the context of other social networks and messengers, let's look at the statistics (October 2020, as you understand, everything has already changed noticeably).

The cost of maintaining Telegram as a service. Messenger economics

Huge audience, constant and explosive growth. Let's evaluate how much it costs to maintain such a colossus and what the money is spent on. Since Telegram is not a public company, we can focus on what Pavel Durov, who created the messenger, said at different times.

The first interview that may be of interest to us dates back to 2015. It originally appeared in the American edition of the Daily Dot, but today the page with this text leads nowhere, the interview has disappeared. Here is the link.

It is extremely difficult to destroy something on the network, so I suggest that you familiarize yourself with a couple of points told in the interview. In particular, Pavel Durov said that in 2015, a million dollars a month was spent on maintaining the messenger. He spent his own money on the messenger, which he received from the sale of a share in the VKontakte social network. And here is his direct speech: “Now we are unstable, we are spending my personal funds. We want the company to be able to cover salaries in the future, because otherwise it's not fair. And I agree that this is where we are going, what we will eventually do, come up with a sustainable business model. I think we will start experimenting with this soon. This will not include paid features, subscriptions, or advertising. Telegram will always be free for the user. Our monetization will most likely include a third party platform and revenue sharing.”

Or this passage: “We are like non-profit organizations in that we also want to spend everything we earn. At the same time, we want to provide for ourselves. Therefore, an important question that users ask us is: “Great product, free, I love it, but what happens in a year, two years, five years, when you gain more popularity and costs increase?”.

When WhatsApp and Viber reached this point, they had to sell out. Their expenses were too high, and they did not find a way to monetize. WhatsApp had a subscription, but if you look at their results in 2014, they made $25M and spent $280M. It's not a sustainable model at all.

We don't want to burn money forever, and we don't want to earn more than we can spend. We want to earn exactly as much as we need for equipment, traffic and salaries. Our team includes the best developers in the world. Some of them were the best on VKontakte, and they followed me to Telegram. They received offers from Facebook, Google. We cannot motivate them with options because it is not a private company held for sale. So we have to pay them competitive salaries, otherwise we wouldn't have developers."

What does Telegram spend money on? This is a development team, office expenses and other small things, since these expenses are negligible compared to the cost of traffic and servers to serve Telegram. Extrapolating 2015 spending to date is not possible, as the average Telegram user of that time and 2021 are very different. The reason is the popularity of the messenger and the fact that it allows you to create public channels that distribute information, and often this is not just text, but photos, videos, voice messages. The same is true for users. I do not have statistics on Telegram user traffic in 2015, but it is possible to see that for Russian users in January 2020 and January 2021, data from one of the Big Three operators. In January 2020, the average amount of data transferred (only mobile data, Wi-Fi is not taken into account, which gives a large error, real data is higher) was 800 MB. In January 2021, we are seeing an increase to 1.4 GB. It is possible to draw conclusions from these data for Russia as a whole, but in other countries the consumption profile is very different.

It is also worth considering that the operator sees data only on his own network. If a person uses two smartphones, then the traffic is multiple times higher, it is duplicated on each device! Here is my data from Telegram, it is above average for Russia (subscription to a dozen channels, active photo sharing).

The cost of maintaining Telegram as a service. Messenger economics  The cost of maintaining Telegram as a service. Economics of the messenger

Look at how much data you are transferring, I think the statistics will surprise you. The only conclusion that can be drawn on the knee sounds extremely simple: today in Telegram the amount of data per user per month is a significant amount and is very different from what we saw in 2015. This is also supported by the fact that people annually consume more and more mobile traffic.

It is clear that Russia is noticeably distinguished by the cheapness of mobile Internet, for example, in India, the picture for the user will be completely different. But there, people also have Wi-Fi, they are no less actively consuming a variety of content. For Telegram, it doesn't really matter how you access the app, over Wi-Fi or over a cellular network. For the service, it is important how much data you transfer, as well as the fact that this data must be stored on servers, as well as pay for traffic to them. The lion's share of Telegram's expenses today are servers that must ensure the operation of the application, and it is also desirable to be located in different countries of the world in order to ensure the best connectivity for the service.

In 2018, figures appear in the Gram cryptocurrency investor prospectus that show how the business of Telegram has changed. In particular, for 2017, the figure of expenses is $70 million, of which $62 million was spent on equipment, traffic, servers and user verification (yes, those same SMS messages). Interestingly, the prospectus also provides a cost projection: 2018 - $100 million, 2019 - $130 million, 2020 - $170 million.

Taking into account that Telegram planned to reach an audience of one billion users by 2022, the costs can be assessed as real and built on the basis of the growth model that was laid in the company. In 2018, no one could have predicted a pandemic, changes in the cost of storing information in data centers, and an increase in the cost of traffic for large clients. We can safely base a growth of 20% on the figures that Telegram cited in 2018 for the past year and the current period. Even according to the most conservative estimates, in 2020 the company's expenses amounted to more than $200 million, while the company did not earn a single penny from its service. Even if you add up all the numbers that Telegram cited and consider them as a minimum cost estimate, it turns out that at the end of 2020, $600 million was spent on the service. Given an audience of 500 million people, this is an excellent result that is undeniable.

In December 2020, Pavel Durov announced for the first time that paid features would appear in Telegram. In the messenger, nothing will change for users, Telegram will remain free for them. Also, users will not see ads in their messages, which is often annoying and repulsive. It is planned to raise money through advanced features, as well as those who use Telegram for business. No specifics were announced, but Durov repeated that there was no talk of selling the company or a stake in it.

For many years, Durov has been building the image of a person who fights for people's rights, creates a tool that protects privacy, and does not monitor his users. The fact is that Telegram stores everything you send through it - messages, files, videos and photos. For the user, this is exactly the same black box as other services, you do not know what is happening inside it, and you can only believe the words of Pavel Durov. Faith is an ephemeral thing, it can be quickly destroyed.

Since 2013, Telegram, according to Durov, lives exclusively on his money. Pavel could have received from $300 million to $480 million from the sale of the VKontakte share, estimates vary greatly. But even if we take the upper limit, Telegram's expenses have already exceeded this amount. In 2018, an ICO was held for the Gram cryptocurrency, in a couple of rounds they raised $1.7 billion. But the American regulator at the end of 2019 banned the release of Gram, the money had to be returned and paid to American investors 10% on top. Interestingly, $470 million of the funds raised were spent on the development of the blockchain platform, as well as maintaining the work of Telegram.

In May 2020, Gram investors were offered a loan agreement, according to which the company is obliged to return all the money attracted by May 1, 2021 and pay 10% for the year of their use (valid from May 1, 2020 to April 30, 2021). Or return 72% of the amount, but then the rate will be 52.7%.

In January 2021, there was a rumor that Durov was offered to sell from 5 to 10% of the company with a total Telegram valuation of $30 billion. But Durov rejected the offer, and all previous statements clearly indicate that the company is not for sale. Agree that it looks at least strange and surprising, because Telegram is a business that eats up hundreds of millions of dollars every year. And they need to be attracted somewhere, charity cannot continue indefinitely. The issue of monetization of the service is acute, but even if Telegram launches such monetization tomorrow, it will not be able to raise sufficient funds to maintain the work, the costs are already greater than the potential revenue.

Against this background, there are not so many ways to solve the problem, but this is if we talk about the business component. I think that we will see a very interesting move from Pavel Durov when he uses his signature feature - the protection of people and their personal data. No mandatory payments, but the collection of data in support of Telegram, the ability to get a “tick” in front of the name that you donated some money. This is a social story that can support the service. It is also a great story to show that Telegram is independent, supported by its users, there is no one behind it. At the same time, my opinion remains unchanged that Telegram was created as an intelligence tool, and the tool is successful, the whole legend around the service is built very correctly. As well as the fact that Telegram has not been making money for many years, this issue simply did not arise before the service. It is easy to believe in the altruism of Pavel Durov, since this is part of his image. But IR MINI DOME Network Camera (DS-2CD2522FWD-IS) I repeat that Telegram is a black box for everyone outside it, and no one knows what is happening inside, what data is stored and how, where it is transferred, and so on. Someone may consider this a conspiracy theory, but all indirect signs point to the same thing. The clumsy attempts to block Telegram in Russia looked like a successful PR campaign. When engineers offered 100% ways to "kill" the service, their advice was simply ignored, which paints the situation in a completely different light.

But if we put aside politics and who actually created Telegram and why, we can say that in the public field the company needs to solve one simple question - to show that it is independent and receives money for its existence from "pure » source. Collecting users' money is ideal for this, especially since among such payments it is easy to hide funding from various government institutions.

The cost of maintaining Telegram as a service. Messenger economics

Many people consider Telegram a messenger, they use it as an advanced version of WhatsApp. I do not share this opinion, since Telegram incorporates the properties of both a messenger and a social network in which you can share content, communicate and maintain contact with an unlimited number of people. We can safely say that Telegram is a tool of another generation, it has replaced the usual messengers and has become a phenomenon without any discounts. In January 2021, the Telegram audience exceeded 500 million people, it is used all over the world. Somewhere they try to ban Telegram, somewhere, on the contrary, they welcome it. The main contributor to the popularity of Telegram was Russia, as the state pretended to want to block the messenger, but never made a real attempt to do so. I can't remember such a large and expensive advertising campaign for another service.

The political strife in America has alienated many people from Facebook, Twitter, Instagram, and an almost unknown Twitter clone called Parler died a heroic death. People were looking for a convenient tool where they could express their thoughts, many discovered Telegram. Facebook underestimated how users perceive their data. For many years, WhatsApp data was transferred to Facebook and used for various purposes, including advertising, a person turned into a product for corporations. The change in WhatsApp's user agreement highlighted this problem, it began to be talked about publicly, and many people decided that they were not a product for Facebook to sell, went in search of another tool and found Telegram. Pavel Durov mentioned that in 72 hours Telegram got 25 million users, a record without any discounts, and both Facebook and the censorship that was introduced in American social networks should be thanked for it.

We can safely say that 2021 is becoming amazing for Telegram, the messenger is already being blocked in the United States by initiative citizens, but these are just flowers, the main events are yet to come. Many argue that Telegram only benefits from this situation, gets tens of millions of users from nowhere, does not spend money on attracting them. A fabulous situation that you can and should rejoice in, but in reality everything is not so perfect. The reason is that each user means additional costs that are dead weight on Telegram. An audience of 500 million people is a notable political force in our world, but since its launch in 2013, Telegram has not brought its owner a penny. This business only eats up millions of dollars every month and looks like a charity project, but can it be? I doubt it.

Let's try to figure out together how much the content of Telegram costs, how expensive the project is, and where the money for it came from. Everyone can draw their own conclusions.

You need to start with an assessment of how Telegram has developed, how its audience has changed. Let's look at the graph.

The cost of maintaining Telegram as a service. Messenger economics

We can say that over the past year Telegram has accelerated, the growth of the audience of 200 million users can be considered a record. But by January 2022, Telegram planned to reach an audience of a billion users, such a forecast was made in 2018, when Pavel Durov was trying to launch his cryptocurrency. The plan looks realistic. To evaluate Telegram in the context of other social networks and messengers, let's look at the statistics (October 2020, as you understand, everything has already changed noticeably).

The cost of maintaining Telegram as a service. Messenger economics

Huge audience, constant and explosive growth. Let's evaluate how much it costs to maintain such a colossus and what the money is spent on. Since Telegram is not a public company, we can focus on what Pavel Durov, who created the messenger, said at different times.

The first interview that may be of interest to us dates back to 2015. It originally appeared in the American edition of the Daily Dot, but today the page with this text leads nowhere, the interview has disappeared. Here is the link.

It is extremely difficult to destroy something on the network, so I suggest that you familiarize yourself with a couple of points told in the interview. In particular, Pavel Durov said that in 2015, a million dollars a month was spent on maintaining the messenger. He spent his own money on the messenger, which he received from the sale of a share in the VKontakte social network. And here is his direct speech: “Now we are unstable, we are spending my personal funds. We want the company to be able to cover salaries in the future, because otherwise it's not fair. And I agree that this is where we are going, what we will eventually do, come up with a sustainable business model. I think we will start experimenting with this soon. This will not include paid features, subscriptions, or advertising. Telegram will always be free for the user. Our monetization will most likely include a third party platform and revenue sharing.”

Or this passage: “We are like non-profit organizations in that we also want to spend everything we earn. At the same time, we want to provide for ourselves. Therefore, an important question that users ask us is: “Great product, free, I love it, but what happens in a year, two years, five years, when you gain more popularity and costs increase?”.

When WhatsApp and Viber reached this point, they had to sell out. Their expenses were too high, and they did not find a way to monetize. WhatsApp had a subscription, but if you look at their results in 2014, they made $25M and spent $280M. It's not a sustainable model at all.

We don't want to burn money forever, and we don't want to earn more than we can spend. We want to earn exactly as much as we need for equipment, traffic and salaries. Our team includes the best developers in the world. Some of them were the best on VKontakte, and they followed me to Telegram. They received offers from Facebook, Google. We cannot motivate them with options because it is not a private company held for sale. So we have to pay them competitive salaries, otherwise we wouldn't have developers."

What does Telegram spend money on? This is a development team, office expenses and other small things, since these expenses are negligible compared to the cost of traffic and servers to serve Telegram. Extrapolating 2015 spending to date is not possible, as the average Telegram user of that time and 2021 are very different. The reason is the popularity of the messenger and the fact that it allows you to create public channels that distribute information, and often this is not just text, but photos, videos, voice messages. The same is true for users. I do not have statistics on Telegram user traffic in 2015, but it is possible to see that for Russian users in January 2020 and January 2021, data from one of the Big Three operators. In January 2020, the average amount of data transferred (only mobile data, Wi-Fi is not taken into account, which gives a large error, real data is higher) was 800 MB. In January 2021, we are seeing an increase to 1.4 GB. It is possible to draw conclusions from these data for Russia as a whole, but in other countries the consumption profile is very different.

It is also worth considering that the operator sees data only on his own network. If a person uses two smartphones, then the traffic is multiple times higher, it is duplicated on each device! Here is my data from Telegram, it is above average for Russia (subscription to a dozen channels, active photo sharing).

The cost of maintaining Telegram as a service. Messenger economics  The cost of maintaining Telegram as a service. Economics of the messenger

Look at how much data you are transferring, I think the statistics will surprise you. The only conclusion that can be drawn on the knee sounds extremely simple: today in Telegram the amount of data per user per month is a significant amount and is very different from what we saw in 2015. This is also supported by the fact that people annually consume more and more mobile traffic.

It is clear that Russia is noticeably distinguished by the cheapness of mobile Internet, for example, in India, the picture for the user will be completely different. But there, people also have Wi-Fi, they are no less actively consuming a variety of content. For Telegram, it doesn't really matter how you access the app, over Wi-Fi or over a cellular network. For the service, it is important how much data you transfer, as well as the fact that this data must be stored on servers, as well as pay for traffic to them. The lion's share of Telegram's expenses today are servers that must ensure the operation of the application, and it is also desirable to be located in different countries of the world in order to ensure the best connectivity for the service.

In 2018, figures appear in the Gram cryptocurrency investor prospectus that show how the business of Telegram has changed. In particular, for 2017, the figure of expenses is $70 million, of which $62 million was spent on equipment, traffic, servers and user verification (yes, those same SMS messages). Interestingly, the prospectus also provides a cost projection: 2018 - $100 million, 2019 - $130 million, 2020 - $170 million.

Taking into account that Telegram planned to reach an audience of one billion users by 2022, the costs can be assessed as real and built on the basis of the growth model that was laid in the company. In 2018, no one could have predicted a pandemic, changes in the cost of storing information in data centers, and an increase in the cost of traffic for large clients. We can safely base a growth of 20% on the figures that Telegram cited in 2018 for the past year and the current period. Even according to the most conservative estimates, in 2020 the company's expenses amounted to more than $200 million, while the company did not earn a single penny from its service. Even if you add up all the numbers that Telegram cited and consider them as a minimum cost estimate, it turns out that at the end of 2020, $600 million was spent on the service. Given an audience of 500 million people, this is an excellent result that is undeniable.

In December 2020, Pavel Durov announced for the first time that paid features would appear in Telegram. In the messenger, nothing will change for users, Telegram will remain free for them. Also, users will not see ads in their messages, which is often annoying and repulsive. It is planned to raise money through advanced features, as well as those who use Telegram for business. No specifics were announced, but Durov repeated that there was no talk of selling the company or a stake in it.

For many years, Durov has been building the image of a person who fights for people's rights, creates a tool that protects privacy, and does not monitor his users. The fact is that Telegram stores everything you send through it - messages, files, videos and photos. For the user, this is exactly the same black box as other services, you do not know what is happening inside it, and you can only believe the words of Pavel Durov. Faith is an ephemeral thing, it can be quickly destroyed.

Since 2013, Telegram, according to Durov, lives exclusively on his money. Pavel could have received from $300 million to $480 million from the sale of the VKontakte share, estimates vary greatly. But even if we take the upper limit, Telegram's expenses have already exceeded this amount. In 2018, an ICO was held for the Gram cryptocurrency, in a couple of rounds they raised $1.7 billion. But the American regulator at the end of 2019 banned the release of Gram, the money had to be returned and paid to American investors 10% on top. Interestingly, $470 million of the funds raised were spent on the development of the blockchain platform, as well as maintaining the work of Telegram.

In May 2020, Gram investors were offered a loan agreement, according to which the company is obliged to return all the money attracted by May 1, 2021 and pay 10% for the year of their use (valid from May 1, 2020 to April 30, 2021). Or return 72% of the amount, but then the rate will be 52.7%.

In January 2021, there was a rumor that Durov was offered to sell from 5 to 10% of the company with a total Telegram valuation of $30 billion. But Durov rejected the offer, and all previous statements clearly indicate that the company is not for sale. Agree that it looks at least strange and surprising, because Telegram is a business that eats up hundreds of millions of dollars every year. And they need to be attracted somewhere, charity cannot continue indefinitely. The issue of monetization of the service is acute, but even if Telegram launches such monetization tomorrow, it will not be able to raise sufficient funds to maintain the work, the costs are already greater than the potential revenue.

But if we put aside politics and who actually created Telegram and why, we can say that in the public field the company needs to solve one simple question - to show that it is independent and receives money for its existence from "pure » source. Collecting users' money is ideal for this, especially since among such payments it is easy to hide funding from various government institutions.

The cost of maintaining Telegram as a service. Messenger economics

Many people consider Telegram a messenger, they use it as an advanced version of WhatsApp. I do not share this opinion, since Telegram incorporates the properties of both a messenger and a social network in which you can share content, communicate and maintain contact with an unlimited number of people. We can safely say that Telegram is a tool of another generation, it has replaced the usual messengers and has become a phenomenon without any discounts. In January 2021, the Telegram audience exceeded 500 million people, it is used all over the world. Somewhere they try to ban Telegram, somewhere, on the contrary, they welcome it. The main contributor to the popularity of Telegram was Russia, as the state pretended to want to block the messenger, but never made a real attempt to do so. I can't remember such a large and expensive advertising campaign for another service.

The political strife in America has alienated many people from Facebook, Twitter, Instagram, and an almost unknown Twitter clone called Parler died a heroic death. People were looking for a convenient tool where they could express their thoughts, many discovered Telegram. Facebook underestimated how users perceive their data. For many years, WhatsApp data was transferred to Facebook and used for various purposes, including advertising, a person turned into a product for corporations. The change in WhatsApp's user agreement highlighted this problem, it began to be talked about publicly, and many people decided that they were not a product for Facebook to sell, went in search of another tool and found Telegram. Pavel Durov mentioned that in 72 hours Telegram got 25 million users, a record without any discounts, and both Facebook and the censorship that was introduced in American social networks should be thanked for it.

We can safely say that 2021 is becoming amazing for Telegram, the messenger is already being blocked in the United States by initiative citizens, but these are just flowers, the main events are yet to come. Many argue that Telegram only benefits from this situation, gets tens of millions of users from nowhere, does not spend money on attracting them. A fabulous situation that you can and should rejoice in, but in reality everything is not so beautiful. The reason is that each user means additional costs that are dead weight on Telegram. An audience of 500 million people is a notable political force in our world, but since its launch in 2013, Telegram has not brought its owner a penny. This business only eats up millions of dollars every month and looks like a charity project, but can it be? I doubt it.

Let's try to figure out together how much the content of Telegram costs, how expensive the project is, and where the money for it came from. Everyone can draw their own conclusions.

You need to start with an assessment of how Telegram has developed, how its audience has changed. Let's look at the graph.

We can say that over the past year Telegram has accelerated, the growth of the audience of 200 million users can be considered a record. But by January 2022, Telegram planned to reach an audience of a billion users, such a forecast was made in 2018, when Pavel Durov was trying to launch his cryptocurrency. The plan looks realistic. To evaluate Telegram in the context of other social networks and messengers, let's look at the statistics (October 2020, as you understand, everything has already changed noticeably).

Huge audience, constant and explosive growth. Let's evaluate how much it costs to maintain such a colossus and what the money is spent on. Since Telegram is not a public company, we can focus on what Pavel Durov, who created the messenger, said at different times.

The first interview that may be of interest to us dates back to 2015. It originally appeared in the American edition of the Daily Dot, but today the page with this text leads nowhere, the interview has disappeared. Here is the link.

It is extremely difficult to destroy something on the network, so I suggest that you familiarize yourself with a couple of points told in the interview. In particular, Pavel Durov said that in 2015, a million dollars a month was spent on maintaining the messenger. He spent his own money on the messenger, which he received from the sale of a share in the VKontakte social network. And here is his direct speech: “Now we are unstable, we are spending my personal funds. We want the company to be able to cover salaries in the future, because otherwise it's not fair. And I agree that this is where we are going, what we will eventually do, come up with a sustainable business model. I think we will start experimenting with this soon. This will not include paid features, subscriptions, or advertising. Telegram will always be free for the user. Our monetization will most likely include a third party platform and revenue sharing.”

Or this passage: “We are like non-profit organizations in that we also want to spend everything we earn. At the same time, we want to provide for ourselves. Therefore, an important question that users ask us is: “Great product, free, I love it, but what happens in a year, two years, five years, when you gain more popularity and costs increase?”.

When WhatsApp and Viber reached this point, they had to sell out. Their expenses were too high, and they did not find a way to monetize. WhatsApp had a subscription, but if you look at their results in 2014, they made $25M and spent $280M. It's not a sustainable model at all.

We don't want to burn money forever, and we don't want to earn more than we can spend. We want to earn exactly as much as we need for equipment, traffic and salaries. Our team includes the best developers in the world. Some of them were the best on VKontakte, and they followed me to Telegram. They received offers from Facebook, Google. We cannot motivate them with options because it is not a private company held for sale. So we have to pay them competitive salaries, otherwise we wouldn't have developers."

What does Telegram spend money on? This is a development team, office expenses and other small things, since these expenses are negligible compared to the cost of traffic and servers to serve Telegram. Extrapolating 2015 spending to date is not possible, as the average Telegram user of that time and 2021 are very different. The reason is the popularity of the messenger and the fact that it allows you to create public channels that distribute information, and often this is not just text, but photos, videos, voice messages. The same is true for users. I do not have statistics on Telegram user traffic in 2015, but it is possible to see that for Russian users in January 2020 and January 2021, data from one of the Big Three operators. In January 2020, the average amount of data transferred (only mobile data, Wi-Fi is not taken into account, which gives a large error, real data is higher) was 800 MB. In January 2021, we are seeing an increase to 1.4 GB. It is possible to draw conclusions from these data for Russia as a whole, but in other countries the consumption profile is very different.

It is also worth considering that the operator sees data only on his own network. If a person uses two smartphones, then the traffic is multiple times higher, it is duplicated on each device! Here is my data from Telegram, it is above average for Russia (subscription to a dozen channels, active photo sharing).

Look at how much data you are transferring, I think the statistics will surprise you. The only conclusion that can be drawn on the knee sounds extremely simple: today in Telegram the amount of data per user per month is a significant amount and is very different from what we saw in 2015. This is also supported by the fact that people annually consume more and more mobile traffic.

It is clear that Russia is noticeably distinguished by the cheapness of mobile Internet, for example, in India, the picture for the user will be completely different. But there, people also have Wi-Fi, they are no less actively consuming a variety of content. For Telegram, it doesn't really matter how you access the app, over Wi-Fi or over a cellular network. For the service, it is important how much data you transfer, as well as the fact that this data must be stored on servers, as well as pay for traffic to them. The lion's share of Telegram's expenses today are servers that must ensure the operation of the application, and it is also desirable to be located in different countries of the world in order to ensure the best connectivity for the service.

In 2018, figures appear in the Gram cryptocurrency investor prospectus that show how the business of Telegram has changed. In particular, for 2017, the figure of expenses is $70 million, of which $62 million was spent on equipment, traffic, servers and user verification (yes, those same SMS messages). Interestingly, the prospectus also provides a cost projection: 2018 - $100 million, 2019 - $130 million, 2020 - $170 million.

Taking into account that Telegram planned to reach an audience of one billion users by 2022, the costs can be assessed as real and built on the basis of the growth model that was laid in the company. In 2018, no one could have predicted a pandemic, changes in the cost of storing information in data centers, and an increase in the cost of traffic for large clients. We can safely base a growth of 20% on the figures that Telegram cited in 2018 for the past year and the current period. Even according to the most conservative estimates, in 2020 the company's expenses amounted to more than $200 million, while the company did not earn a single penny from its service. Even if you add up all the numbers that Telegram cited and consider them as a minimum cost estimate, it turns out that at the end of 2020, $600 million was spent on the service. Given an audience of 500 million people, this is an excellent result that is undeniable.

In December 2020, Pavel Durov announced for the first time that paid features would appear in Telegram. In the messenger, nothing will change for users, Telegram will remain free for them. Also, users will not see ads in their messages, which is often annoying and repulsive. It is planned to raise money through advanced features, as well as those who use Telegram for business. No specifics were announced, but Durov repeated that there was no talk of selling the company or a stake in it.

For many years, Durov has been building the image of a person who fights for people's rights, creates a tool that protects privacy, and does not monitor his users. The fact is that Telegram stores everything you send through it - messages, files, videos and photos. For the user, this is exactly the same black box as other services, you do not know what is happening inside it, and you can only believe the words of Pavel Durov. Faith is an ephemeral thing, it can be quickly destroyed.

Since 2013, Telegram, according to Durov, lives exclusively on his money. From the sale of the share of VKontakte, Pavel could receive from 300 to 480 million dollars, estimates vary greatly. But even if we take the upper limit, Telegram's expenses have already exceeded this amount. In 2018, an ICO was held for the Gram cryptocurrency, in a couple of rounds they raised $1.7 billion. But the American regulator at the end of 2019 banned the release of Gram, the money had to be returned and paid to American investors 10% on top. Interestingly, $470 million of the funds raised were spent on the development of the blockchain platform, as well as maintaining the work of Telegram.

In May 2020, Gram investors were offered a loan agreement, according to which the company is obliged to return all the money attracted by May 1, 2021 and pay 10% for the year of their use (valid from May 1, 2020 to April 30, 2021). Or return 72% of the amount, but then the rate will be 52.7%.

In January 2021, there was a rumor that Durov was offered to sell from 5 to 10% of the company with a total Telegram valuation of $30 billion. But Durov rejected the offer, and all previous statements clearly indicate that the company is not for sale. Agree that this looks at least strange and surprising, because Telegram is a business that eats up hundreds of millions of dollars every year. And they need to be attracted somewhere, charity cannot continue indefinitely. The issue of monetization of the service is acute, but even if Telegram launches such monetization tomorrow, it will not be able to raise sufficient funds to maintain the work, the costs are already greater than the potential revenue.

Against this background, there are not so many ways to solve the problem, but this is if we talk about the business component. I think that we will see a very interesting move from Pavel Durov when he uses his signature feature - the protection of people and their personal data. No mandatory payments, but the collection of data in support of Telegram, the ability to get a “tick” in front of the name that you donated some money. This is a social story that can support the service. It is also a great story to show that Telegram is independent, supported by its users, there is no one behind it. At the same time, my opinion remains unchanged that Telegram was created as an intelligence tool, and the tool is successful, the whole legend around the service is built very correctly. As well as the fact that Telegram has not been making money for many years, this issue simply did not arise before the service. It is easy to believe in the altruism of Pavel Durov, since this is part of his image. But IR MINI DOME Network Camera (DS-2CD2522FWD-IS) I repeat that Telegram is a black box for everyone outside of it, and no one knows what is happening inside, what data is stored and how, where it is transferred, and so on. Someone may consider this a conspiracy theory, but all indirect signs point to the same thing. The clumsy attempts to block Telegram in Russia looked like a successful PR campaign. When engineers offered 100% ways to "kill" the service, their advice was simply ignored, which paints the situation in a completely different light.

Against this background, there are not so many ways to solve the problem, but this is if we talk about the business component. I think that we will see a very interesting move from Pavel Durov when he uses his signature feature - the protection of people and their personal data. No mandatory payments, but the collection of data in support of Telegram, the ability to get a “tick” in front of the name that you donated some money. This is a social story that can support the service. It is also a great story to show that Telegram is independent, supported by its users, there is no one behind it. At the same time, my opinion remains unchanged that Telegram was created as an intelligence tool, and the tool is successful, the whole legend around the service is built very correctly. As well as the fact that Telegram has not been making money for many years, this issue simply did not arise before the service. It is easy to believe in the altruism of Pavel Durov, since this is part of his image. But IR MINI DOME Network Camera (DS-2CD2522FWD-IS) IR MINI DOME Network Camera (DS-2CD2522FWD-IS) I repeat that Telegram is a black box for everyone outside it, and no one knows what is happening inside, what data is stored and how, where it is transferred, and so on. Someone may consider this a conspiracy theory, but all indirect signs point to the same thing. The clumsy attempts to block Telegram in Russia looked like a successful PR campaign. When engineers suggested 100% ways to "kill" the service, their advice was simply ignored, which paints the situation in a completely different light.

But if we put aside politics and who actually created Telegram and why, we can say that in the public field the company needs to solve one simple question - to show that it is independent and receives money for its existence from "pure » source. Collecting users' money is ideal for this, especially since among such payments it is easy to hide funding from various government institutions.