In the age of smartphones, social media platforms are the new conduit to popular culture. The days of getting all your social media updates from in front of your computer are over. Interacting through social media on the go and around the clock has become the new standard. Snapchat helps capture the essence of a moment in ways you can’t on any other platform, and that’s why people share with it.
Snapchat for the uninitiated
When you’re on a trip halfway across the country, a nice mid-hike landscape shot and a seven-second video of your hotel room artfully geo-filtered with a ‘Seattle’ overlay makes for more compelling content than a blog entry about it on Facebook. Under more mundane circumstances, it’s 1pm on a Tuesday and you just want to share a selfie with the infamous doggy ears and nose. In either case, your friends will watch it indiscriminately, the evidence becomes just a memory within 24 hours, and your feed readies for the next post. That is the quick and tidy essence of Snapchat that is indispensable to attention-deficient millennials.
Doggy ears, custom wedding photo filters, and exclusive pop-journalism articles à la Cosmopolitan and Teen Vogue are a few features of Snapchat that have helped it manifest its own hype. It’s a unique platform because everything that exists within it has a very short shelf-life. Snapchat has perfected the “you are there now” first-person experience valuing nothing less than the freshest content. With a format like that, you can sell anything new every single day to your users.
Except they’re not paying for any of it.
So, how does Snapchat make money?
In fact, the free-to-use Snapchat app pulls in 98% of its revenue by selling space on their home screen to magazines, advertisers, and other blog sites. It may be a company recently valued anywhere between $17 and $22 billion, but within the last two years, their losses have increased — from $300 million in 2015 to a loss of over $500 million in 2016. Snapchat points most of the blame at the competition (Instagram ‘stories’, Facebook, etc.) and having already recruited the majority of their target market — there are only so many people under 25.
As of March 2017, Snapchat is going public on the New York Stock Exchange. What does this mean? It means that at a projected $14–16 dollars per share, the public will be able to invest in 200 million shares of Snapchat. That comes out to about $3 billion pumped into a service that is very likely not even used by a significant portion of its investors.
Snapchat might be growing up
As a daily Snapchat user within their main demographic, I definitely see the value of Snapchat and have yet to bore of it. It takes a lot for me to sit through the Cosmo and BuzzFeed stories, and I generally rush through advertisements because I dislike being subjected to them. Regardless, I use it every day and I can’t think of anything I’d replace it with; I love watching people’s lives and I love sharing my own.
While I’m nowhere near an astute economist nor am I well versed in investing my time and money in stocks, I am still an important user that people are risking their money on and I don’t think it’s a good idea. Millennials are constantly typecast as flippant and unreliable consumers. I usually find that insulting, but I think it’s very relevant when you have people willing to invest huge sums of money in what I decided was ‘cool’ at 19 years old.
On the other hand, my manager, a local restaurateur, has a Snapchat account. I can only imagine how useful it is for him to send short videos back and forth to investors and colleagues and handle business in real-time in such a concise format. Snapchat is a highly efficient communication tool, combining the instant-gratification and speed of text with the personalization a FaceTime or Skype video-chat would provide.
A new Snapchat?
Young people choose Snapchat every day because there’s nothing else like it. They have a perfect formula that continues to set them apart; even Instagram felt threatened enough to replicate what they have going on. However, when corporations sell a novelty people consider personal and part of their everyday lives, it cheapens how special or fun it is. It’s icky to know that you’re enjoying yourself for free while people who aren’t the creators want to make money off of you logging in every day. Soon, changes to the interface begin to take the place of familiar features, in favor of what investors want. Usability and customer satisfaction begins to come second and eventually, the idea of using your favorite app becomes a turnoff.
In all, I acknowledge that Snapchat is a unique contender in holding the attention of a majority of the youth given their obvious staying power. If managed correctly, they could be around for a long time. However, as a dedicated user who still has an eye out for the next ‘cool’ platform, I wouldn’t bet on it sticking around for the long-term unless it can evolve with its audience. I can only hope that Snapchat going public is a move that affirms their growth and credibility as a platform because I’d hate to see Snapchat lose what got them here.