When Snapchat skyrocketed to success upon launching in September 2011, it was a simple but unique communications app that allowed its users to interact with each other using only photos. Now, fast forward seven years later, and at Vidcon in Anaheim California, Snapchat announced this week that it too will follow the digital trend of high-quality video production with a new publisher-led Snapchat Show.
Snapchat’s first attempt at commissioned programming will be an as yet unnamed project with beauty YouTuber Patrick Starr and co-produced with US television network and publisher E!. With the recent introduction of IGTV and the monetisation of Facebook videos, high-quality video production is quickly becoming an alternate revenue stream for publishers.
Snapchat Shows are an alternative to the one-minute videos its users are used to. Shows can vary between three to five minutes long and can be found under the ‘Shows’ header in the story section. Snapchat Discover is populated with as many as 60 brands worldwide, from BuzzFeed to The New York Times.
Snapchat’s publisher-led show arrives at a time when mobile is becoming increasingly more influential in the growth of spending online. According to a study by Forrester Research, mobile is predicted to account for 72% of the growth in spending on online video advertising. A study by Nielsen data also shows that smartphone share of online video time per person grew from 21% in 2016 to 30% in 2017. This suggests the new publisher-led show featured on the mobile-based app can be beneficial to advertisers and publishers alike if they can take advantage of the projected video growth.
Snapchat Discover, where the new publisher-led show is likely to be featured, generated more than $100 million for its media partners in 2017, the company said in its fourth-quarter earnings report. Publishers have been negotiating with Snapchat for a while in a bid to introduce branded content, which will let them craft messages in association with sponsors, make the ads look channel-friendly and perhaps drive up value for their services on the platform. The introduction of long-form, high quality branded content with contribution from publishers will also allow publishers to gain access to a potential alternative revenue stream.
Snap’s Lauren Gallo said onstage that the company has been experimenting with revenue sharing. She also said her focuses for the creator-publisher community are growth, discoverability, analytics, and monetization. Snapchat would not give specifics on the deals during the keynote at Vidcon but Gallo said onstage,“what we’re doing is we’re listening”.
How do publishers benefit?
An immediate benefit for publishers, with the arrival of the new show, will be the access to the 300 million+ active users of the app. Snapchat offers publishers a platform to expose their brands to new, younger audiences. The challenge of using Snapchat Discover effectively to benefit from its wide reach is for publishers to translate their brands to suit the platform and turn contacts into long-term relationships. With the large revenue generated by Snapchat Discover and access to over 187 million users, publishers can use the show’s reach to gain access to a wider audience and potentially use it as a sustainable revenue stream.
Over the past several months, Snapchat has been notifying Snapchat Discover publishers that it will stop paying an upfront licensing fee for them to produce daily and weekly editions. Instead, Snapchat has been changing the deals to focus entirely on sharing ad revenue generated from Snapchat Discover and its shows. Snap typically does an even split with publishers on ad revenue generated by their channels so, the introduction of a new publisher and creator led show means publishers may be able to make use of Snapchat as an alternative revenue stream.
And that’s the thing about Snapchat Discover and the shows it promotes. With a global reach and over 187 million daily users, a publisher-led Snapchat show has the potential to become an alternative revenue stream for publishers, even if the platform’s new policy does not split revenue with its publisher partners.