Snap intends to stop paying its publisher partners upfront licensing fees for their daily and weekly Discover editions, as well as publishers’ digital magazine-like collections of photos and videos in the app. The social company is opting to have Discover publishers monetize solely from ad revenue instead.
Previously, it typically paid Discover publishers an upfront licensing fee and, in return, kept all ad revenue generated from their channels. The decision is reportedly a leading cause for CNN’s recent exit.
Snap’s reported decision to stop paying publishers upfront may be influenced by less-than-ideal Discover viewership, which is likely the result of several factors, chief amongst them was its 2018 redesign which shook up the Discover platform and came under vociferous criticism.
Snap also moved users’ Stories out of Discover, lowering the incentive for people who primarily use the messaging app to communicate with their friends to visit the Discover side of the app.
However, all this won’t deter publishers from investing in creating Snapchat Discover editions altogether, given the app’s strong appeal to teens and potential ad revenue payouts — Snapchat paid $100 million in revenue to its publisher partners in ad revenue sharing deals in 2017, for example.
Business Insider: Snapchat axes licensing deals with publishers amid redesign turmoil