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Snap to Pay $1 Million a Day to Creators for Spotlight Videos

Sarah Frier
·3 min read

(Bloomberg) -- Snap Inc. is rolling out a new tool for its Snapchat app to feature popular videos, called Spotlight, and said it will pay out $1 million a day to creators of the top-performing posts.

To earn the money, video submitters to Spotlight don’t have to have large followers -- or even have public profiles. Instead, an algorithm will determine what to show Snapchat users based on how often others view the post. If others view the same video repeatedly, for instance, that’s a signal it’s catching on and will spur the algorithm to distribute it more widely.

The new feature will help Snapchat in a competitive market for posting entertaining videos online, dominated by Facebook Inc.’s Instagram and Google’s YouTube, with China-based ByteDance Ltd.’s TikTok rising fast among younger audiences. Snap Chief Executive Officer Evan Spiegel has eschewed public metrics, such as likes and follows, that drive the market for influencers, the most-followed users on photo-sharing apps.

On Snapchat, which hit 249 million daily active users in the third quarter, likes are private, there is no re-sharing of videos and displaying follower numbers is optional. Without those metrics, though, it’s harder for users to get popular, noticed by brands and hired to create sponsored content -- the main way young social media stars make a living.

Spiegel wants Spotlight to reward popular videos without their creators having to worry about consistency or the number of followers.

Social media platforms are striving to attract the makers of quality content. TikTok plans to spend more than $1 billion in the U.S. in the next three years on video-makers. Instagram has been paying some of TikTok’s top stars to test out its TikTok copycat feature, Reels. Instagram also recently started for the first time sharing revenue on video ads with creators, like YouTube does.

It’s unclear whether the random chance for a big payout will pull users’ great ideas away from TikTok and Instagram, but Snap provides a unique option: a video’s maker can choose to be private, offering a break from influencer culture. Snap has previously benefited by betting on a product that lowers pressure for users. Stories, the Snapchat videos that disappear after 24 hours, became so popular that the product has been copied by Instagram, Facebook, LinkedIn and Twitter Inc.

Other companies have tried the payout strategy in the past, including the game-show app HQ Trivia. But most users don’t win those prizes, and the novelty of competing for them can wear off quickly.

Snap shares have almost tripled this year to a record $45.38 earlier this month as young people turn to Snapchat to message friends videos during the coronavirus. The app also features television shows and magazines designed for a young audience on mobile. Spotlight will start in the U.S., Canada, Australia, New Zealand, the U.K., Ireland, Norway, Sweden, Denmark, Germany, and France, the company said.

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