Does Snapchat Have A Place In The Crowded Digital Video Space?

There’s a lot of hype around Snap Inc., parent company of Snapchat, and its upcoming IPO. The company has valued itself at $25 billion and reportedly plans to sell $3 billion of non-voting shares. Snapchat’s biggest draw is that it appeals to a young generation that craves immediacy and novelty. Users can easily send photos or videos that ostensibly disappear not long after the recipient views them. Snapchat’s 158 million active users, many of them under 25, send more than 2.5 billion snaps per day.

But in the long run, as with all social media companies, Snap will have to evolve to remain relevant. The largest social media sites – Facebook, Twitter – all have their eye on a strategy that involves video content. Can Snap become a major player in this game, with a sustainable competitive position? Possibly, given Snapchat's unique user experience and captive, young user base. But it will have to fight hard to establish its position in an increasingly crowded digital video marketplace.

Snapchat's differentiators

I think Snapchat has a shot because of its unique tools for user-generated video. Snap recognizes that its users crave novelty. In addition to its photo and video decorating tools like emojis, bitmojis (personalized emojis), and stickers, it cleverly created the following revenue-generating tools to embellish snaps:

    Sponsored Lenses:  Allows users to add graphics and animation to their photos. According to Adweek, after Taco Bell created a sponsored lens for Cinco de Mayo that let users turn their head into a taco, the lens received 224 million views in one day. The Financial Times estimated that the advertiser cost for Sponsored Lenses ranges from $450,000 or more on a “nonpeak day” to $750,000 for a tie-in to a holiday or event.
    Geofilters: Tag a city or event, like San Francisco, with special graphics.
    Spectacles: The wearer can capture and share circular video that mirrors the experience of the eyeball. Through Spectacles, users can share video directly with their networks more quickly than recording and sharing video.
    Discover: Special editions for mobile video of TV shows such as The Bachelor and The Voice, and other content.

Another advantage for Snapchat is that its experience is more like how we watch TV, compared to other social media sites. As the Wall Street Journal recently noted, “Once your network is sufficiently big, viewing stories can feel like the 'lean back' experience of watching television, as opposed to the 'lean forward' experience of engaging on social media... It’s reality TV, starring people you know.”

Read more at: http://www.forbes.com/sites/nelsongranados/2017/02/09/does-snapchat-have-a-place-in-the-crowded-digital-video-space/#1b7f42227779

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