For $4 a month, Snapchat+ followers will get access to additional features, but the advertising won’t disappear from their screens.
Our business model is still primarily based on advertising revenue, but we see subscriptions as a potentially interesting model.explains Snap Inc. in a press release.
No net profit
Snapchat has more than 332 million daily active users worldwide, according to the Californian group. It generated more than US$4 billion (C$5.15 billion) in revenue in 2021, but never posted an annual net profit.
The paid version of the application will initially be offered in ten countries, including Canada, the United States, France, Australia and Saudi Arabia.
Subscribers will have more options to personalize their profile, highlighting their favorite friendships, for example. They will also have more information on the number of contacts interested in their Stories.
At the end of May, Snap Inc. issued a profit warning that sent its stock price plummeting.
Like other platforms, Snapchat is suffering from the economic crisis (inflation, slow supply chain, etc.) which is weighing on advertisers’ budgets.
It also suffers from the change in Apple’s regulations, which requires application publishers to obtain the consent of Internet users before tracking them in their navigation to collect data for advertising targeting purposes.
Most major social networks have begun to diversify their sources of revenue after years of relying primarily on very large-scale targeted advertising, based on the collection of personal data.