Snapchat: Oh The Possibilities!

I don’t use Snapchat. I don’t get it, I confess. Maybe I’m just too old for it because none of my close friends use it either… But it is a company I am starting to find very interesting from a broader media & entertainment perspective, so things may change.

It started with the launch of the Discover platform, an always-on, daily refreshed channel guide offering curated content (alongside brand advertisements) from media partners such as National Geographic, Vice, Daily Mail, Comedy Central, CNN, Food Network, and ESPN, among others.

Snapchat currently reaches 100M users and delivers more than 7B video views every single day - rivaling Facebook (8B views) which has 16 times as many users (1.6B) - and has allowed other brands to piggyback on its phenomenal growth. One such brand is BuzzFeed, with more than one-fifth of its content being viewed through Discover. Beauty brands have also experimented on Snapchat with an eye towards its vast female user base (70% of total users).

Discover has been such a successful initiative that, during a generally negative earnings call last week, Viacom announced a deal with Snapchat to sell ads on its behalf, add more channels to Discover, and give Snapchat special access to Viacom-sponsored events like the MTV VMA’s. If a traditional and large media company like Viacom understands the potential of Snapchat, it is a sign that things are about to become very interesting indeed!

One example of a potential Snapchat initiative I am looking forward to see is the rumored subscription option for its Discover channels. Not unlike Twitch or Youtube, this will enable users to know when ESPN or MTV posts a new video, for instance. Which opens up a lot of very interesting avenues for Snapchat (although the first question that crossed my mind was “what took you so long?”).

First, this enables Snapchat to grow the Discover platform, adding more channels without the risk (or at least reducing it) of older channels falling into oblivion. Second, if Snapchat provides the option for paid subscriptions, they are in fact allowing the creation of walled gardens for premium content, which is something some media partners may find attractive. Finally, if subscriptions are expanded to the wider Snapchat user base, it gives Snapchat talent an option to monetize their activities and content on the platform. How long until we start talking about Snapchat celebrities, like we do today with YouTube, Twitch or Instagram?

It is not just Snapchat that is expanding, by the way. Other popular messaging services out there, realizing that messaging itself does not bring enough growth or competitive advantage, are becoming broader platforms bringing additional content and/or services. LINE has a thriving stickers and gaming business, LINE Pay (mobile payments), LINE Out (low cost VOIP calls) and LINE Music (a subscription on-demand music service). Tencent’s WeChat allows its 700M+ users to order cabs, buy film tickets, play games, check in for flights, pay bills, recognize music, order food and book doctor appointments. I would assume that Facebook, by creating a separate messaging app, has similar plans for it (if not, they should!)

HBO's Girls

As for the general online advertising market, services like Snapchat are ideally placed to launch meaningful and engaging campaigns, with the added plus of not being affected by the advent of ad blockers. Snapchat is a great way to launch contests or distribute sneak peeks, behind the scenes and other targeted videos (like what HBO did with Girls). Of course, a lot of this will depend on Snapchat’s efforts to “educate” the traditional side of the media industry. But it seems the deal with Viacom will help raising the game.

70% of Snapchat’s users are younger than 25. Although this is a fickle and volatile demographic segment, it is also a desirable one. I still find surprising how many companies are not jumping at the opportunity to establish innovative partnerships with Snapchat to target this young audience… and if even Goldman Sachs has found an interesting way to use it, I am sure your company could do the same as well!