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Snapchat adds ‘challenges’ with cash prizes to its TikTok competitor

It’s also rolling out a gifting feature

Snapchat’s Spotlight Challenges
Image: Snap

Snapchat is adding another way for creators to earn cash. The app is launching a feature called Spotlight Challenges, which will reward a handful of creators each week for making videos using specific Lenses, doing certain activities, or playing a chosen sound inside the app’s TikTok competitor, Spotlight.

Around three to five creators will be awarded cash for each challenge, with the winners being chosen from among the most-viewed eligible videos. Payments will be divided among winners from prize pools that “typically range from $1k to $25k,” with the minimum payout being $250, according to Snap. There’ll be multiple challenges every week.

The challenges offer a new way for Snap to incentivize users to make videos for Spotlight — and it does so in a way that offers the company a lot of control. It can boost certain trends or try to encourage different types of content than people would typically make. That could help as it tries to differentiate Spotlight from TikTok and give people a reason to keep coming back to find something new.

It’s also a potential revenue opportunity. Challenges won’t be sponsored at launch, but Snap “may” offer sponsored ones in the future, a Snap spokesperson told The Verge.

Challenges are rolling out now in the US, with more markets to follow. The spokesperson says these payments will be in addition to the millions of dollars per month the company pays out to creators globally who make top Spotlight videos. Snap was paying $1 million per day at launch, but later reduced the sum to a less-specific “millions per month.”

The payments seem to have been working, at least as of a few months ago. In July, Snap said daily usage of Spotlight was up 49 percent quarter over quarter. Time spent per day was also up more than 60 percent in the US — though in both cases, Snap didn’t share the actual figures.

In addition to Challenges, Snap is adding a couple other ways for creators to get paid. Gifting is now rolling out globally, allowing viewers to tip creators with digital tokens, of which they’ll get a revenue cut. Snap is also expanding its Creator Marketplace to include video creators, letting businesses connect with them for sponsorships. Access to these features is limited, however: only approved “Snap Stars” are eligible for gifting and the marketplace, and creators have to be invited by Snap to participate in that program.

Correction October 6th, 9:40AM ET: Snap clarified after publication that the “$1k to $25k” figure is the typical prize pool for Challenges, not the typical range for individual payouts.