Snapchat’s Subscription Play: A Sign of Things to Come for Creator Economies?
Snap Inc. Is diving deeper into the creator economy with the launch of “Creator Subscriptions,” allowing fans to directly support their favorite Snapchat personalities. This move, announced exclusively to CNBC, signals a broader trend: social media platforms are increasingly recognizing the need to diversify revenue streams beyond advertising and empower creators with more sustainable income models.
The Rise of Direct-to-Fan Monetization
For years, creators have relied heavily on advertising revenue, brand sponsorships, and affiliate marketing. However, these income sources can be unpredictable and often require massive reach. Direct-to-fan subscriptions offer a more stable and predictable revenue stream, fostering a closer relationship between creators and their most dedicated audiences. Platforms like Patreon, Substack, and OnlyFans have already demonstrated the viability of this model.
Snapchat Joins the Subscription Race
Snap’s modern feature allows users to pay between $4.99 and $19.99 monthly for exclusive content from creators, including direct photos and videos, subscriber-only Stories, and prioritized replies. Creators will receive approximately 60% of the subscription revenue after platform fees. Snap is initially testing the feature with 15 creators, expanding to roughly 10 more in the U.S., with plans to include Canada, the U.K., and France. Notable participants include David Dobrik, Catherine Paiz, and Skai Jackson.
Beyond Snapchat: A Landscape of Creator Subscriptions
Snapchat isn’t alone in embracing subscriptions. YouTube launched Channel Memberships in 2018, offering creators 70% of revenue. Meta followed suit in 2020 and 2022, enabling subscriptions on Facebook and Instagram, where creators currently keep 100% of subscription revenue after fees. This widespread adoption highlights the growing importance of direct-to-fan monetization.
Snap’s Unique Advantage: Distribution and Discovery
According to Jim Shepherd, Snap’s head of content partnerships, Snap’s strength lies in its distribution capabilities, particularly through the Spotlight feature, which showcases short-form videos and helps creators build a following. This built-in discovery engine could give Snapchat an edge in attracting and retaining creators.
The Future of Creator Economies: What to Expect
The trend towards creator subscriptions is likely to accelerate. Here’s what we can anticipate:
- Increased Platform Competition: More social media platforms will introduce or expand subscription offerings to compete for creators and revenue.
- Tiered Subscription Models: Creators will likely experiment with different subscription tiers, offering varying levels of access and benefits to cater to diverse fan bases.
- Integration with Other Revenue Streams: Subscriptions will likely be integrated with other monetization methods, such as advertising and brand partnerships, creating a diversified income portfolio for creators.
- Focus on Community Building: Platforms will prioritize tools and features that facilitate community building, enabling creators to foster deeper connections with their subscribers.
- Expansion to New Content Formats: Subscriptions will extend beyond video and text-based content to include exclusive access to events, merchandise, and other unique experiences.
FAQ
Q: What percentage of subscription revenue do creators receive on Snapchat?
A: Creators receive approximately 60% of subscription revenue after platform fees.
Q: Is the Creator Subscriptions feature available on Android?
A: No, This proves currently only available for users with Apple iOS devices.
Q: What price range can creators set for their subscriptions?
A: Creators can set their subscription price between $4.99 and $19.99 per month.
Q: How many creators are initially participating in the Snapchat Creator Subscriptions test?
A: 15 creators are initially participating, with roughly 10 more expected to join during the early test phase.
Did you know? Snap’s existing subscription offerings, Snapchat+ and Memories Storage Plans, grew 71% year over year to reach 24 million users.
Pro Tip: Creators should carefully consider their content strategy and audience engagement when setting subscription prices. Offering exclusive, high-value content is key to attracting and retaining subscribers.
Wish to learn more about the evolving creator economy? Explore our other articles on digital marketing trends and social media strategies.
