In late 2017, CNN made an astonishing announcement: it was putting an end to “The Update,” a daily show it had launched on Snapchat just a few months before. The WSJ reported that CNN didn’t see a “good path” to making money on the show, and CNN Digital Worldwide editor Meredith Artley later elaborated that the cable news network “found that it wasn’t working for us as an investment” and that “revenue was not off-the-charts amazing.”
At the time, Snapchat was still considered a gateway to younger viewers, with most teens and young 20 somethings listing it as their favorite app. Even if the short term revenue wasn’t there, surely CNN could see the value of having a direct pipeline to this hard-to-reach-demographic?
Flash forward a year, and CNN’s decision is seeming pretty prescient. The combination of Instagram’s wholesale copying of Snapchat’s Stories format and the app’s disastrous redesign has brought its growth to a halt.
Snapchat has seen a decline in users for two quarters in a row, falling from 191 million daily active users in Q1 to 186 million in Q3. At the same time, Instagram Stories has grown to 400 million daily users, easily eclipsing Snapchat’s efforts. And Snap executives have predicted that it will lose more users in Q4.
What’s worse, Snapchat has lost its coveted claim to being the most beloved social app for teens. A biannual survey by investment bank Piper Jaffray found that 85 percent of teens say they use Instagram monthly, versus 84 percent for Snapchat. Sure, that’s only a slight edge, but it’s trending in the wrong direction.
And these trends are impacting publishers who create content for Snapchat. An anonymous publisher told New York Magazine that, after Snapchat’s redesign that separated stories posted by personal contacts from the more polished content produced by media companies, traffic to its content dropped by “more than half.” “It’s hard to motivate people to sink time into sick animation work when the numbers come back and it’s like, ‘oh, almost no one is seeing this,’” they said.
What’s worse, Snapchat has switched up how it pays for content. It used to offer upfront, advance payments that at least covered production costs. But starting in May, it shifted to an ad revenue sharing system. And after Snapchat laid off 7 percent of its workforce in March, some publishers have complained of a communications breakdown with the company. “At this moment, we have almost no reachable contact at Snap,” one publisher told New York. “Before the layoffs, about two or three months ago, we had Discover reps who would help us workshop tile copy and gave us feedback on performance. They are now essentially all gone and we get either radio silence or a delayed response. I think because they are so overwhelmed trying to make up for lost people.”
Now, other publishers are following CNN’s lead. Conde Nast, for instance, recently announced it was shutting down its Snapchat channels for several of its magazines, though it plans to continue producing Snapchat content for Teen Vogue and Self.
And of course it’s worth mentioning that these are just the publishers that the app has officially partnered with — meaning they’re likely receiving preferential treatment. Smaller publishers who aren’t able to attract such attention don’t even get a cut of Snapchat’s advertising.
It’s not entirely uncommon for publishers to throw entire teams at Snapchat so they can produce exclusive content that isn’t found anywhere else. Given these recent developments, is it worth continuing this practice?
Unless your current efforts are already producing meaningful revenue or Snapchat offers to pay you in advance, I’d say it’s just not worth the investment.
That’s not to say you should completely abandon the app. An anonymous publisher recently explained to Digiday how their company approaches Snapchat:
Now we are thinking more and more about how we can utilize the non-exclusive content we make for other platforms for Snapchat, and vice versa. Vertical video is going to remain a huge focus for everyone, but because we’ve turned our Snapchat team into a multimedia team in the past year or so — and the content we make for Snapchat we can utilize in 20 different ways — we’re not going to feel as much of a loss.
The nice thing about the Stories format being cloned by virtually every other platform — from Instagram to Facebook to Whatsapp, to even Google search results — is that it’s much easier to repurpose content across multiple platforms, ensuring that you can squeeze more value out of single piece of content.
And Snapchat seems to have recognized that publishers aren’t able to invest as much resources into exclusive content. It launched a series of partnerships with media companies that would allow them to curate videos and images from Snapchat’s user-generated content, a move that should help cut down on production costs.
It also seems to be funding original content again. It announced a slate of episodic, scripted shows, and it appears to be producing these shows in-house. Such a move seems to a signal a Netflix-like approach to exclusive, premium content.
There’s no way to sugarcoat it: things don’t look good for Snapchat, and while it’s not unheard of for a struggling platform to pull itself out of a tailspin — Twitter’s recent comeback comes to mind — publishers need to prepare for the scenario in which ends up becoming the next Myspace, which is to say that they should prioritize their content production for platforms that are on a firmer footing.
Publishers aren’t charities, and they shouldn’t be in the habit of giving away free content without seeing some kind of return on their investment. The entire value proposition of the tech platforms is that they can drive value that can’t be found on a publisher’s own website. Once that value dries up, then it’s time to cut and run.