What Does Snapchat’s New Discovery Product Mean For Marketers?
Yesterday, Snapchat launched its much-awaited Discovery product, allowing users to consume content from a number of different media companies including Viacom, CNN, and Vice. Discovery is a radical expansion of Snapchat’s core capabilities from a messaging service with vanishing photos and videos to a modern day media portal. BMW sponsors the CNN content, showing off another way for brands to advertise using Snapchat.
While Viacom and others partnered with Snapchat to reach a younger demographic that has shunned cable television, it’s not entirely clear if these media companies will be a fixture on Snapchat well into the future. One of the ways that media companies make money is by aggregating large numbers of viewers on their own platforms and selling ads against those viewers. On Snapchat, media companies get a raw deal because they never get viewers onto their own platforms, forcing them to share advertising revenue with Snapchat. The major benefit that they do get is an opportunity to experiment with packaging their content for a new medium. Don’t be surprised if you see a new CNN app that showcases everything they learned while working with Snapchat.
Snapchat’s Discovery reminds me of YouTube’s Original Channels, which featured partnerships with Slate, The Wall Street Journal and other established media brands. Even with $100 million in investment, many of these channels ultimately fizzled as media companies realized that it would be more profitable to develop their own video platforms rather than share revenue with YouTube. YouTube learned from this mistake and pivoted, investing in homegrown stars like Michelle Phan and Bethany Mota who wouldn’t exist without YouTube.
From a usability perspective, it’s also unclear why a user would open Snapchat and navigate to the CNN app, or any other app for that matter. After all, it’s a lot easier to access the native CNN app from the phone’s home screen. In fact, Snapchat Discovery looks identical to a smart phone’s home screen, yet contains none of its functionality. Sure, the CNN content on Snapchat might be more engaging, but what’s stopping CNN from creating its own app with edgier content for a non-cable demographic?
The really interesting feature of Discovery is the Snap Channel, which will showcase Snapchat’s original and curated content. Snapchat has already created wonderful content and now users will have the opportunity to view a whole lot more of it. To me, this feature makes the most sense. As people spend more and more time on their mobile devices they will need more and more content to consume. We’ve seen this idea play out in the investment community as venture capitalists, who once shunned content companies, are now throwing cash at BuzzFeed, Vox and others. The challenge for Snapchat is that it’s much more difficult to monetize user-generated content than it is to monetize premium content from established media brands. If the Snap Channel can transition Snapchat from the platform that it is today into a vertically integrated media company that creates and distributes premium content, it will be well on its way to justifying its $10 billion valuation.
