Viber is a popular voice over Internet protocol (VOIP) application, used by roughly one billion users in hundreds of countries worldwide to make calls and send instant messages. While Viber-to-Viber calls are free, users must pay in order to make international calls and for special features. The company also generates money from a suite of business services as well. One of the reasons behind Viber’s popularity lies in its mandate to never charge for its software, never display any ads, and never charge for Viber-to-Viber calls or text messages.

The software behind Viber was created in 2010 in Tel Aviv, Israel. While the company remained unprofitable for two years, it began to generate revenue in 2013. In 2014, Japanese ecommerce company Rakuten purchased Viber for a reported $900 million. In 2017, to reflect the change in ownership of the company, Viber officially became known as Rakuten Viber.

Although Rakuten does not provide detailed revenue information for Viber to the public, its FY2017 annual report indicated that revenues for the VOIP service had more than doubled over the previous year, with net sales climbing by 123.3% for the same time period.

Viber's Business Model

Official documents from Rakuten showed that Viber made a total of $1.5 million dollars in revenue and incurred net losses of $29.5 million in 2013 and $14.7 million in 2012. At the time of its acquisition by Rakuten, Viber had committed to being a free-to-download service and to being ad-free into the future. At this point, while Viber is still free for users to download and Viber-to-Viber calls remain free as well, users do experience ads on both desktop and mobile platforms. Indeed, advertisements have become a key component of Viber's revenue generation strategy.

Viber primarily generates revenue through three streams: the company's international phone service Viber Out, sticker and marketplace sales for users, and its business services; including advertisements as well as other brand-building and marketing offers.

Key Takeaways

  • Viber is a VOIP service allowing users to call or instant message around the world.
  • The basic service is free to use, but users must pay for international calls.
  • Viber also generates revenue through sticker sales to users and through a suite of business services.

Viber's International Call Business

Viber Out is a fee-based service that allows Viber users to make long distance calls to non-Viber users on landlines or through similar channels. The service was launched in 2013 following the aftermath of Typhoon Haiyan, allowing residents of the Philippines to contact their loved ones in impacted parts of the country. Since then, the service has gone global and offers competitive rates against a similar service offered by Skype. Users looking to make international calls can pay variable rates for blocks of minutes or for access windows during which unlimited calls can be made. The exact rates and settings offered depend upon the initiation and destination countries for the calls.

Fast Fact

Viber users make more than seven million interactions via the mobile and desktop platforms every minute.

Viber's Stickers and Games Business

As for stickers and games, Viber users can download for free or pay for sticker packs—designed by Viber or through licensing deals with artists—as well as play downloadable freemium games with other Viber users. More recently, businesses have been able to pay for and design stickers to be marketed to Viber users as well.

Fast Fact

Viber is the official communications channel for FC Barcelona.

Viber's Business Servies

Most recently, Viber has launched a suite of business and marketing services as well. With an engaged audience of about one billion distinct accounts all over the world, Viber offers businesses tremendous exposure in their marketing and brand development campaigns.

Through Viber's business services, companies can purchase advertisements which are displayed to users in a variety of ways, including immediately after a call is completed, if a call is left unanswered, after a user downloads a free sticker pack, within a news feed on a public account page, on the service's "Discover" page, and on desktop displays, among other places as well. Companies can also engage users with custom sticker packs, including via clickable stickers, audio or video stickers, and special promotional codes.

Future Plans

Although official figures are scarce, Viber's impressive user base and growing range of services suggests it is prepared to become a tremendous source of revenue for Rakuten. It can be surmised that Rakuten’s executives have noticed competitor Line’s breakaway success, for example. Line reported more than $513 million in revenue for the first quarter of 2019, generated largely through freemium games and stickers, a strategy that Viber has also implemented. Viber will no doubt seek to increase its revenue stream through further replications of its competitors’ successes, while pursuing some initiatives of its own. Some of the options available to Viber include:

  • Social Networking: Back in 2014, Viber introduced Viber Public Chats, a step towards making Viber a hybrid social network utility in the vein of TenCent’s WeChat. Users are able to follow conversation streams of public individuals and are able to comment if they are a follower of said individual. Since that time, the service has only continued to grow, and it's likely that Viber will continue to expand it going forward.
  • Shopping: Rakuten already enjoys a large share of the ecommerce market in Japan and it would be beneficial to integrate Viber’s large user base into this ecosystem. The launch of Line’s Line Mart, a peer-to-peer marketplace, earlier this year will add further support for Viber to enter the online shopping world.
  • Brand Pages: Similar to Kakao Talk’s Plus Friend, users can make “friends” with their favorite brands and, in return, get exclusive deals and features through direct messaging.

Key Challenges

In under a decade of service, Viber has developed a robust global user base and a strong brand. More recently, the company has successfully monetized some of its services while also keeping key features free. Though the inclusion of ads went against Viber's early policies, the gambit appears to have paid off. Nonetheless, Viber likely faces numerous challenges going forward, particularly if it aims to continue to grow its revenue generation potential.

Standing Out From the Competition

Perhaps the most significant challenge Viber faces is through global competition. As technology in the VOIP area has advanced dramatically, more and more companies have entered into the space. Viber faces competition from major global rivals like WhatsApp, as well as from more localized or regional peers. Social media platforms have ventured into the VOIP area too, further increasing competition.

Viber must also continue to demonstrate to businesses that its services, including paid advertisements, sticker campaigns, and the like, remain effective means of engaging with customers. If the customer base should change or stop responding as favorably to these modes of engagement, Viber will have to dramatically shift its approach or face the prospect of losing business.