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SNAP's Snapchat+ Adds 1M Paying Customers, Gets New Features

·3 min read

Snap Inc. SNAP has found early success with its paid subscription service Snapchat+, which has reached 1 million subscribers since its launch on Jun 29. Snap pitched the new offering as a way to get access to exclusive, experimental and pre-release features.

The platform has begun rolling out new features to allow users to customize their experience. New Snapchat app icon designs and the Priority Story Replies option for subscribers to have their messages seen more often by celebrities on Snapchat are two of the four new features that were unveiled recently.

Users can give their Bitmoji background more flair with special backgrounds like gleaming gold and a beach paradise. They can also pick an emoji they want their friends to see after they view Snaps.

In the United States, Snapchat+ $3.99 monthly subscription fee grants access to 11 premium features that is not yet available to regular users. These features include Snapchat+ Badge, Friend Solar System, Snapchat for Web, Ghost Trails on the Map Best Friends Forever (Pin as No. 1 Best Friend) and Story Rewatch Indicator among others.

According to Snap, the paid membership functionality is now available in 25 locations worldwide, including Canada, the UK, France, Germany, Australia, Saudi Arabia, India, and Egypt.

Snap Inc. Price and Consensus

Snap Inc. Price and Consensus
Snap Inc. Price and Consensus

Snap Inc. price-consensus-chart | Snap Inc. Quote

Feature Addition to Aid User Growth Amid Tepid Ad Revenues

Snapchat had 347 million average daily active users (DAU) in the second quarter, up 15 million sequentially and topping its previous forecast for DAU net adds. However, Snap missed its earnings expectations, which the company attributed in large part to slowing advertising demand because of macroeconomic factors.

Due to record-high inflation, which is forcing firms to cut back on their marketing expenditures, social media giants Snap, Twitter TWTR, and Meta Platforms META — all of which get the majority of their revenues from selling digital advertising — are dealing with a deteriorating ad market.

This Zacks Rank #4 (Sell) company is reportedly planning a wave of layoffs to cut costs. This development comes after IT companies, crypto exchanges and financial firms cut out jobs and slowed down the hiring process due to slow global economic growth caused by higher interest rates, rising inflation and an energy crisis in Europe.

The company is focused on introducing several features to retain existing users and attract new ones to its platform. Snapchat has also announced a new feature for all users called the Family Center, which will be released globally in the coming weeks, giving parents the ability to keep a tab on who their kids are chatting with.

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.

Earlier this year, Snap rolled out a feature that enabled users to share Alphabet GOOGL owned, YouTube video links via the Snapchat Camera platform.

With the integration of this feature, Snapchatters can directly access the video within Alphabet’s YouTube app or any other mobile browser, with just a tap on the YouTube stickers available on the Snapchat app.

Twitter, which is in a legal battle with billionaire Elon Musk over his attempt to walk away from his $44-billion deal to buy the company, also previously launched a $4.99 per month subscription product called Twitter Blue.

Meta Platforms’ 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.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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