Suddenly, struggling social network Snap Inc. (NYSE: SNAP) has become the darling of the old media TV news business. TV has found Snap is a good way to distribute programs, especially to young people. At the same time, Snap’s Snapchat has found some relevance among marketers.
CNN will begin to post a news show called “The Update” that will be streamed on Snapchat. It will post at 6 p.m. EST, just before most networks air their prime-time news. According to several media reports, the show will have as many has five segments.
The CNN effort follows one by NBC called “Stay Tuned.” Website Axious says 29 million people saw the program. The site also reports that 60% of these viewers were under age 25. Most traditional news shows have audiences that skew much older. One concern among TV news executives is that the audiences for the programs will age and eventually die out.
One question about this trend is how Snap will benefit directly. Presumably, it does not get any revenue from the news shows. It does, however, demonstrate that major media have found a new conduit they can use for programming. And TV news programming is supported by advertising. In fairly direct way, television has affirmed that Snapchat is a good place for traditional marketers.
Snap has troubled its investors with low revenue, although it is growing. In the most recent quarter, revenue reached $181 million, up from $72 million in the year ago period. Daily active users remain well behind the largest social networks. They totaled 173 million in the quarter, barely up from the first quarter of 2017. Wall Street has deserted the recent IPO. Its shares are down 32% in the past three months to $14.
If Snap’s description of itself is to be believed, video is at the core of its future:
Snap Inc. is a camera company.
We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate. Our products empower people to express themselves, live in the moment, learn about the world, and have fun together.
Our flagship product, Snapchat, is a camera application that was created to help people communicate through short videos and images. We call each of those short videos or images a Snap. On average, 173 million people use Snapchat daily, and over 3.0 billion Snaps are created every day. On average, our users visit Snapchat more than 20 times per day and spend over 30 minutes on Snapchat every day.
Maybe Snap can turn what TV news shows are signaling about its audience and turn it into new ad revenue of its own.