The Future of Snapchat
Several students have written blog posts on the rise of Snapchat. One student compares the growth of Snapchat to that of Facebook, claiming, “Snapchat has now become a phenomenon among all age groups” (Tracing Snapchat’s Rapid Growth). Another student writes, “Snapchat has…taken the social medial scene by storm” (The Snapchat Effect). While these claims are both correct, they do not consider the long-term life of Snapchat.
With new releases such as a video feature and lenses, some experts believe that Snapchat is poised to take over Facebook. According to an article published in Fortune magazine, Snapchat’s video views have tripled in the last six months, hitting almost 6 billion views per day. The article questions what Snapchat means by ‘video views’, noting that Facebook considers a video as viewed if a user has stayed on it for at least 3 seconds; however, if Snapchat’s 6 billion figure is true, it would be nearing Facebook’s 8 billion views per day. It is difficult to make money off of videos that disappear in seconds rather than videos that are permanently published on the Internet. Interestingly, the vanishing video feature is also the feature that differentiates Snapchat from video sharing competitors like Youtube and Facebook. Can the novelty and uniqueness of such a feature outweigh the potential money challenges?
Though Snapchat has grown quickly, its future is still in question. Global Equities Research analyst Trip Chowdry observes that “there is a big disconnect between something that is cool and something that is durable” (Chapman), which brings up the question, what made Facebook durable, and how can Snapchat follow in it’s footsteps. Chowdry brings up other Internet startups, which once were in a similar position as Snapchat but have failed to reach the popularity of Facebook, such as Groupon, Box, and Zynga. Somehow, those companies attracted users initially but failed to continuously grow their user base. Perhaps these companies failed to gain a number of initial users above the tipping point of their products’ reservation prices. Even if the initial number of users was beyond the tipping point, somehow, the popularity of those companies failed to skyrocket. They may not have generated enough revenue to become major players in the world of giant Internet companies.
Recently, Snapchat abandoned their original content strategy in favor for a new strategy intended to achieve a “more sustainable future” (Morrison). As part of this strategy, Snapchat is trying is monetizing off its lenses feature by including sponsored lenses. Could this be how Snapchat generates a “truly meaningful revenue” that helps them transition to being viewed as a mainstream service rather than a start-up tech company?
Ingram: http://fortune.com/2015/11/09/snapchat-video/
Chapman: http://phys.org/news/2015-11-snapchat-tomorrow.html
Morrison: http://www.adweek.com/socialtimes/will-sponsored-lenses-be-the-future-of-snapchat-advertising/629487