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Snap Gets on the Subscription Bandwagon
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Snap Gets on the Subscription Bandwagon

Story Highlights

By unveiling Snapchat +, a paid version of its networking app, Snap has set out to diversify its revenue stream and reduce its dependence on the advertising business. 

Snap (SNAP) has taken the initial step to reduce its dependence on advertising revenue. The social networking giant has released Snapchat+, a paid version of its main app. In a press release, the company confirmed the paid version would be available in select countries, including the U.S., the UK, Canada, and Germany, for $3.99 a month.

According to Reuters, the paid version will come with the ability to change the app’s icon. Users can also see who rewatched their stories and pin other users on their chat history. The new service will also unlock exclusive and pre-released features.

Strategic Impact

CNBC reports that Snapchat+ could help Snap diversify its revenue base. More people subscribing to the paid version is expected to decrease the company’s dependence on advertising revenues.

However, the company’s Senior Vice-President of products, Jacob Andreou, believes that the paid version of the app may not prove to be a material new revenue source.

Wall Street’s Take

As per TipRanks, the Street is optimistic about the stock and has a Strong Buy consensus rating based on 24 Buys, six Holds and two Sells. Snap’s average price forecast of $28.97 implies 120.47% upside potential from current levels.

Bloggers’ Stance

TipRanks data shows that financial bloggers are 64% Bullish on SNAP, compared to the sector average of 65%.

Key Takeaway

The unveiling of Snapchat+ marks an essential milestone in Snap’s push to strengthen its revenue base. The paid version gaining traction in key markets has the potential to put the company back on the growth path.

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