Khaberni - Snap has launched a new subscription feature that enables content creators to generate recurring income directly from their most engaged followers, within the framework of the company's efforts to diversify its income sources away from advertisements.
The company told CNBC that it will start testing the "Creator Subscriptions" feature on Monday, with a small group of creators on Snapchat, according to a network report.
With slowing user growth, Snap's expansion into paid subscriptions for content creators highlights the company's initiative to increase income away from advertisements and build more stable revenue streams.
Evan Spiegel, CEO of Snap, wrote earlier this month in the company's Q4 results: "Next year, subscriber growth will be a key indicator to track our progress."
Snap’s current subscription offerings, namely "Snapchat Plus" and memory storage plans, have grown by 71% year-over-year to reach 24 million users during this period. However, the company recorded 474 million daily active users, down by 3 million users from the previous quarter.
With the upcoming feature, Snapchat users will be able to pay to subscribe to their favorite content creators' channels and get exclusive content, including live photos or videos, in addition to access to a subscriber-only story and sending text responses that can be highlighted at the top of the content creator's general story.
Jim Shepherd, Head of Content Partnerships at Snap, in an interview with CNBC said: "We want the next step in our long-term journey of monetizing content creators to be built on real relationships,” adding: “(We want) to help content creators expand the ways they earn money in a predictable way and they can generate income from their most engaged fans."
With this move, Snap enters a market that is increasingly competitive with direct fan subscription services.
Platforms like Patreon, Substack, and OnlyFans rely on paid memberships, while major social media companies have launched their own subscription tools within their apps.
In 2018, Google-owned YouTube began offering channel memberships, where content creators receive 70% of membership revenues after deducting taxes and fees, with the company covering transaction costs.
In 2020 and 2022 respectively, Facebook and Instagram, owned by Meta, began allowing content creators to offer subscriptions, and Meta currently allows them to keep 100% of subscription revenues after deducting fees, according to the company’s website.
On Snapchat, content creators will be able to set their subscription price themselves within a range from $4.99 to $19.99 per month.
After deducting platform fees, creators will receive about 60% of subscription revenues. Snap said it will provide content creators with performance data to guide pricing decisions as the product evolves after the initial testing phase.
The first batch of participants includes 15 content creators at launch, with about 10 others expected to join in the United States during the early testing phase.
The company also said that outreach efforts are ongoing in Canada, the United Kingdom, and France. Participants in the program include well-known content creators like David Dobrik, Katherine Pais, Harry Jowsey, Jeremiah Brown, and Skai Jackson.
