Snapchat+ announced with exclusive features and $4 monthly subscription charge
Snap Inc. has introduced its much-anticipated paid subscription service Snapchat+ in several countries. It will offer exclusive and early access features at a price of $3.99 per month. The subscription is aimed at those who spend more time than others on Snapchat. The company has made it clear that the paid tier will not impact the importance of ads for the company.
Why does this story matter?
Snap has been on a bit of a downward trajectory. A month ago, the company warned of its slowing revenue growth. If we go even further behind, we'll see the company's recurring difficulty to monetize the chat part of its app without ads. The introduction of Snapchat+ is expected to be a step in the right direction for the company.
You will be able to customize the app icon
Snapchat+ is initially more of a cosmetic upgrade. The most notable features are the ability to customize the app icon, see who rewatched a story, and pin a friend as '"BFF" to the top of the chat history. In its blog post, Snap said, "This subscription will allow us to deliver new Snapchat features to some of the most passionate members of our community."
Interaction-based features will reach non-premium users
The features released on Snapchat+ that rely on interaction with others will be available for non-paid users going forward. However, features like BFF pin that is "single-playerish" in nature will remain a premium feature.
Will Snapchat+ become a new source of revenue for Snap?
With the introduction of a paid service, the pertinent question is whether the company considers it an important future source of revenue or not. Jacob Andreou, Snap's SVP of Product, said that there are no expectations of Plus becoming a "material new revenue source." It should be noted that this is the company's first real attempt at making revenue outside of advertising.
Ads will continue to be Snap's core revenue source
Snap has been hugely dependent on ads for its revenue since its inception. The creation of a paid tier is bound to make people wonder whether the company will let subscribers turn ads off or not. Andreou downplayed such a possibility and said, "ads are going to be at the core of our business model for the long term."
Snapchat+ has been launched in Snap's top markets
The arrival of Snapchat+ is sooner than many expected. Two weeks ago, the company called it an early internal test. Snap has launched the service in its top markets, including the US, Canada, the UK, France, Germany, Australia, New Zealand, Saudi Arabia, and the UAE. With its share price trading below its IPO price, this might be a proactive step to regain lost ground.