TechCrunch recently reported that Line was going Operator. This is a clear bellwether of what I believe is the third wave of monetization strategies for messaging apps.
Monetization of messaging apps was (and is predominantly still) first wave - straight advertising. The second wave includes forays into in-app purchases that had no utility outside of that messaging experience - mainly stickers, or subscriptions for WhatsApp.
The rising tide of “invisible apps,” chat-based apps powered by conversation, will lead to a marked shift in the monetization of chat apps.
Digital advertising is an increasingly winner-take-all market, as detailed by Ben Thompson in his excellent post on how Aggregation Theory affects digital advertising. What’s interesting is this shift in monetization shifts chat apps away from advertising, creating an advancement that will be an opportunity for second-placers if incumbents focus on their primary revenue source. Advertising isn’t going away as this third wave comes crashing in!
Now the uncertainty for me isn’t whether this will happen or not (I believe it will), but how the market dynamics play out. Will a shift to retail monetization strategy reinforce or weaken winner-take-all effects?