Snap is trying to create a new revenue stream from one of Snapchat's most addictive features, part of a broader effort to branch out beyond advertising.
The company is planning to have Snapchat users pay a fee to restore a broken Snapstreak, according to two people familiar with the situation. Snap is considering a $0.99 charge that will allow a Snapchat user to maintain a "streak" of having sent a Snap to a friend on the app for a consecutive number of days, even if they missed a day, the people said. A Snap spokesperson declined to comment.
The plan could change before the feature is released. Indeed, monetizing Streaks is an idea that's been brought up before inside the company, the people familiar said. It was an "obvious" way Snap could make money, one of the people added. The move was rejected in the past, in part because Streaks were seen in some corners of the company as incentivizing problematic or unhealthy usage by young users, and also because Streaks were such a critical part of Snapchat usage, it felt risky to change it, the people explained. They asked not to be identified discussing private matters.
Anxiety about breaking a Streak can be intense
Snapstreaks have for years been one of Snap's most popular features, and it's even been seen as a barometer of friendship. Teens, Snap's largest demographic, can be committed to using Snapchat daily just to maintain Streaks with friends. Many users have Streaks going for more than 100 days and some have streaks for thousands of days.
"It's the only reason a huge chunk of people even use the app," one of the people familiar with the company's plans said.
Anxiety about breaking a Streak can be intense. Users frequently go to the Snapchat Support website to try to get their Streaks restored, both of the people said. Snap often does restore a streak at no cost, but it's a process that can take several days, further upsetting users.
More than $400 million in annual revenue
With the option to pay for the restoration of a missed day, users won't have to wait and Snap will make incremental revenue that could, in theory, become a large amount. If 10% of Snap's daily users paid for one streak restoration a month, that would be more than $400 million in annual revenue.
"Too bad they didn't do it earlier," one of the people familiar with the situation said. "It could have saved people's livelihoods."
Snap is looking to expand revenue beyond advertising. A few months ago, it rolled out Snapchat+, a monthly $3.99 subscription offering users exclusive access to new features. It was launched about three weeks before Snap laid off 20% of its staff to cut costs in the face of slowing growth and new investor demand for profitability.
During the last two earnings calls, Snapchat+ has been described as "an opportunity" for revenue growth, but little has been said about its adoption by the platform's 363 million daily users.
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