Snap this week introduced paid creator subscriptions in a bid to develop revenue streams beyond advertising, CNBC reports. The new Snapchat feature begins testing on Monday and will allow creators to charge their most engaged fans for exclusive content like photos and videos. CEO Evan Spiegel is pushing growth after reporting a decline of 3 million daily active users, to 474 million, last quarter. Subscriptions will cost between $4.99 and $19.99 per month while placing Snap in a crowded paid-memberships field that includes Patreon, Substack, YouTube, and Meta.
Snap (SNAP) made headlines Tuesday after announcing a new monetization feature: Creator Subscriptions. The offering will allow creators to charge their most loyal followers for exclusive content, including direct photos and videos, subscriber-only Stories, and prioritized replies. Creators will be able to set their own pricing, creating recurring revenue opportunities.
The rollout will begin as a limited test, with select creators gaining early access. Snap described the feature as a natural extension of its existing subscription offerings, including Snapchat+.
Despite the announcement, SNAP stock edged lower Tuesday, extending its 40.15% decline year to date and a 56.25% drop over the past 12 months. Trading volume was relatively muted at around 92,000 shares, compared to a three-month daily average of approximately 58 million.
Wall Street currently rates SNAP a Hold, based on a mix of Buy, Hold, and Sell recommendations. The average price target of $8.17 implies potential upside from current levels, but investors appear to be waiting for clearer evidence that Creator Subscriptions can materially impact revenue and profitability.
Snap is introducing a subscription feature that will allow creators to earn recurring income directly from their most engaged fans, as the social media company works to diversify beyond advertising.
The Los Angeles company will begin testing "Creator Subscriptions," as the feature is called, on Monday, starting with a small cohort of Snapchat creators, the company told CNBC exclusively. With user growth moderating, Snap's expansion into paid creator subscriptions emphasizes the company's initiative to grow income beyond advertising and build more predictable revenue streams.
"In the year ahead, growth in subscribers will be a critical input metric to track our progress," Snap CEO Evan Spiegel wrote earlier this month as part of the company's fourth-quarter results.