Snap Inc. SNAP, the parent company of the photo messaging app, Snapchat, is reportedly doing early internal testing for a new subscription service called Snapchat+ that would give subscribers access to exclusive and pre-release features, per The Verge Report.
According to screenshots and information posted on Twitter by app researcher Alessandro Paluzzi, subscribers on Snapchat+ will be able to pin friends to the top of their list as #1 BFF, gain access to exclusive icons, show a special badge on their profile, and also see how many friends have re-watched their Stories.
Snapchat+ would cost 4.59 euros for a one-month subscription or 45.99 euros for one year, with a discount for those who subscribe to a semi-annual or annual plan, according to the screenshots Paluzzi posted on Twitter.
Snap Inc. Price and Consensus
Snap Inc. price-consensus-chart | Snap Inc. Quote
Snapchat+ Likely to Aid Snap’s Declining Revenues
Snapchat+ is one way through which the company is looking to get more revenues amid economic challenges, supply-chain disruptions and inflation, which may continue to affect revenue growth and advertising demand.
The move toward a subscription-based business model may be the result of App Tracking Transparency, a feature introduced by Apple AAPL in iOS 14 that requires apps to ask users before tracking their data. Companies like Snap and Meta META have admitted that Apple’s new guideline policies have been affecting their revenues, which are largely based on advertisements.
Snapchat, in particular, cited changes to iOS as a reason for missed revenue targets and has said that it will slow down hiring this year. Snap has added a number of features, including the Tab feature on Friends and Discover to make its Snapchat platform more attractive to users and advertisers.
Moreover, this Zacks Rank #3 (Hold) company’s transition to an automated or programmatic auction of Snap Ads is driving its advertising revenues. The company’s advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters. Moreover, Snapchat’s new conversion tracking tool, Snap Pixel, is also gaining traction. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In first-quarter 2022, Snap’s daily active users (DAUs) grew 18% to 332 million year on year. By introducing new subscription plans, these companies expect to offset losses in advertising revenues by charging for access to exclusive features that won’t be available to free users.
Snapchat is not the only social network that has been working on subscription plans. last year, Twitter TWTR launched its Twitter Blue subscription service that also unlocked additional features for $2.99 per month. More recently, Telegram also confirmed that it has plans to introduce a Premium subscription with extra features later this month, although the pricing remains unclear.
Meta-owned Instagram is also testing the same subscription plans but for creators only, as of now. Instagram expects that with subscriptions, creators will be able to develop deeper connections with their most engaged followers and grow their recurring monthly income by giving subscribers access to exclusive content and benefits.
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