Snapchat has 1 million subscribers to its premium offer
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Evan Spiegel’s group hopes to be less dependent on advertising thanks to this service.
Has Snapchat found its lifeline? The social network announced on Sunday that it had one million subscribers to its new paid service “Snapchat+”. Launched in June, this subscription offer gives access to a few new features like knowing who has watched their story several times or a web version of their messaging system. These extras cost 4.59 euros per month, or 45.99 euros for 12 months. They are only available in certain countries including France.
One million subscribers may seem insignificant when compared to the 347 million active users of Little Ghost Messenger. In just four weeks, Snapchat+ has nevertheless allowed the company to reap $5 million according to a study by Sensor Towers. This sum does not currently represent much in the balance sheet of the company. In the second quarter, its turnover is around 1.1 billion dollarsa revenue derived largely from advertising.
But the subscription has a great advantage: recurrence. Snap is fully exposed to variations in the advertising market. However, the current macroeconomic context is pushing advertisers to reduce their marketing envelopes. If it can obtain the majority of its income from subscriptions, the group will enjoy stronger support.
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Stock market improvement
This new growth driver could help increase the company’s revenues over the long term. On average, a user brought $3.20 in advertising revenue to the company in the second quarter, down 4% year-on-year. A lower return than the cheapest of the subscriptions which brings in $3.33 per month.
The announcement of the milestone of one million confirms Snap in its strategy and offers a breather to its share price. The capitalization of the group has collapsed by almost 80% over one year, but in the last five days, the action has climbed by 19.5%.
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