Snapchat has found its lifeline. The social network announced on Sunday that it has one million subscribers to its new Snapchat+ paid service. Launched in June, this subscription offering lets you take advantage of some small new features, like knowing who’s viewed their story multiple times or the web version of the messaging system. These premiums cost €4.59 per month or €45.99 for 12 months. They are only available in certain countries, including France.
One million subscribers may seem insignificant when compared to Little Ghost Messenger’s 347 million active users. In just four weeks, Snapchat+, however, has allowed the company to raise $5 million, according to a study by Sensor Towers. This amount currently does not represent much on the company’s balance sheet. In the second quarter, its turnover was about 1.1 billion dollars, which was mainly obtained from advertising.
But subscription has one big advantage: repetition. Snap is fully exposed to fluctuations in the advertising market. However, the current macroeconomic context is pushing advertisers to reduce their marketing envelopes. If he can get most of his income from subscriptions, the group will enjoy stronger support.
Stock market improvement
This new growth driver can help increase the company’s earnings in the long run. On average, a user generated $3.20 in ad revenue for the company in the second quarter, down 4% year-over-year. A lower return than the cheapest of the subscriptions, which comes in at $3.33 per month.
The announcement of the one million milestone validates Snap’s strategy and gives a boost to its stock price. The group’s capitalization has collapsed by almost 80% in a year, but the stock is up 19.5% in the last five days.
Source: Le Figaro
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.