"How will Snapchat ever make money?"
The question feels quaint now. The four-year-old messaging app was, not that long ago, a poster child for eye-popping startup valuations and the ever-present fear of yet another bubble pop. Snapchat has been ridiculed by those who perceived it as a service for sexting, shamed when it rebuffed Facebook’s offer to be acquired it for $3 billion, and pestered it with questions about when and how it would start giving back money to investors.
Today Snapchat is worth $16 billion, has more than 500 employees, and today announced its first paid feature for consumers: Snapchat Replays. Users can now buy three snaps for 99 cents, but still can’t replay any individual snap one more than once. It’s an extension of a feature Snapchat introduced almost two years ago letting users replay a single snap each day.
The update also included the ability to add wacky animations to your face, like googly eyes and other unsettling deformations, in with what Snapchat calls Lenses. The tech behind Lenses originated with Looksery, a Ukrainian startup Snapchat purchased for $150 million, The Verge confirmed.
Not only are Replays an obvious revenue-generator for Snapchat, but there is every reason to believe they're something the app’s users would pay for. Snapchat has cultivated a user base of 100 million voracious video consumers who log in every day. And once they do, they proceed to watch more than 4 billion clips over the course of 24 hours — from friends, celebrities, strangers, and the world’s best-known brands and entertainment companies. Tapping into its users’ desire to rewatch a must-see video looks like easy money.
"How will Snapchat ever make money?" Oh right, this
It speaks to Snapchat’s vision of itself as a different kind of social app that it felt the need to apologize for the feature in the very post that announced it. "They’re a little pricey, but time is money! ;)," Snapchat wrote on its blog, presumably while CEO Evan Spiegel wore the Monopoly top hat. But as a free app headed toward an initial public offering, Snapchat has to experiment with different revenue streams — and paid replays feel like a fairly gentle exploration of the world of in-app purchases.
For longtime and loyal Snapchat users, however, the news is perhaps more bittersweet. After all, every story of growth doubles as a tale about what was left behind. Snapchat is unapologetically monetizing, and further minimizing, the feature that first differentiated it from the slew of chat clones to break out during the smartphone boom. Replays chip away at the notion of Snapchat as an ephemeral messenger. And the less ephemeral your snaps are, the more Snapchat begins to feel like just another messaging service.
The bittersweet feeling of less ephemeral snaps
And maybe that’s the point. Snapchat is just a messaging service, but it’s one younger smartphone owners use obsessively — and in ways that Spiegel and crew have been able to shape with rare skill. The company began chipping away at its hallmark disappearing act years ago with the introduction of Snapchat Stories, which lets you keep images and videos live for a full day, letting you craft longer narratives.
Snapchat transformed again when it added one-on-one text messaging and instant video chatting, turning Snapchat into a viable Facebook Chat and WhatsApp competitor. In January of this year, Snapchat introduced the Discover tab, which lets news organizations and entertainment companies like CNN, ESPN, and The Food Network communicate with Snapchat’s entire audience. The tab, accessed by swiping left, is now a developing source of news, sports video, micro television, and whatever else partners think will catch on.
What’s clear is that there’s now much less reason to write off Snapchat as a silly toy only children will use. Snapchat is now a place where Comedy Central launches TV shows, where you might launch an entertainment career, and where single-day video advertisements — images, let us remind you, that will disappear — initially cost as much as $750,000.
As Snapchat matures, it's destined to change
As a user, I’ve never gone all-in with Snapchat. But I have remained a fan of the company’s bold jankiness: the confounding user interface; the so-bad-it’s-good app icon; the overwhelming "how the hell do I use this" feeling you get upon first opening it. Those are the oddities that may inspire nostalgia when they eventually slink away, to be remembered only as highlights of Snapchat’s younger, crazier days.
Because it seems only a matter of time before Snapchat starts rethinking not just how it makes money and the ways it’s used, but also how it looks and feels. A new app icon, perhaps, or a slick, Apple-inspired overhaul to show Snapchat is growing up. As Snapchat matures, it’s destined to change, just as Facebook, Twitter, and every other explosively popular communication tool in the smartphone age has done before it.
Verge Video: Snapchat secrets revealed