The Snapchat+ hits keep coming. After launching and racking up a million+ paid users, the premium service this week has rolled out a set of new features. Among other things, subscribers can personalize the look and feel of the app, including styling icons and the camera capture button (think: soccer ball).
Personalization features also include custom backgrounds. This takes shape in a new “Chat Wallpapers,” which lets users choose from a set of templates or any image in their camera roll. A comparable feature has proven popular in WhatsApp (see our thoughts earlier this week on feature copying).
Thirdly, Snapchat+ subscribers can gift a subscription to a friend. This gives the recipient a 12-month subscription for free, while the gifter pays a discounted rate of $39.99 (two months free). This could be a clever way to piggyback on the holiday season and boost Snapchat+ revenue and network effect.
But the customization options stand out most. This builds on the broader momentum of micropayments and in-app purchases, many of which are based on personalization features like Skins (see Fortnite). This makes sense for social media monetization where self-expression is a central component.
Dopamine Rush
As background on Snapchat+, it launched in June, joining the emerging crop of paid tiers in the social world such as Twitter Blue. It offers premium perks for power users at a cost of $3.99 per month. Those perks include deeper analytics on published Stories, such as seeing who rewatched a Story.
These metrics have proven valuable for Snapchat power users hooked on that ever-validating dopamine rush. It’s also geared towards influencers and brand marketers who want to optimize their output or retarget audiences. For anyone using Snapchat to that capacity, $3.99 per month could be a no-brainer.
The subscription also offers experimental and pre-release Snapchat features, which may appeal to power users. There’s also an expanding feature set that includes the above updates as well as special badges, location tracking, and pinning profiles of close friends for easy access to messaging threads.
For Snap, all of the above is driven by the need to offset ad revenue declines. That’s a reality today due to diminished ad spending in an economic downturn, as well as privacy reform headwinds that face all ad-supported media players. We’re talking legislative and private-sector measures like Apple’s ATT.
On to Something
In a similar sense, Snapchat+ is all about revenue diversification, which can help Snap insulate itself from ad market volatility. As it often goes, Snap wants new revenue streams as it gets larger and core revenue matures. This is similar to Twitter’s motivations for Blue, which is now going through some transitions.
Snap is also looking for ways to get Wall Street excited. Despite a few recent rallies, its stock has fallen throughout 2022, along with the broader software market. Like Meta and others, it’s feeling an additional sting from privacy reform, as noted, and escalating competition from the mighty TikTok.
There’s also a generally-rising backlash against ad-supported businesses, which amplifies all the above. Though Snap and many others weren’t necessarily bad actors with personal data misuse, there’s a push against the broader cohort of ad-supported businesses, compelling things like subscription offers.
In that light, Snapchat+ can be seen as a bit of an experiment. Though market pressures push towards less ad revenue models, it’s not a foregone conclusion that consumers actually want paid/premium content. But if Snapchat+ performance so far is any indication, Snap is likely on to something.
