Snap Inc. ( SNAP Quick Quote SNAP - Free Report) is rolling out a $3.99/month subscription plan for Snapchat, the photo messaging app, which unlocks exclusive and pre-release features. It’s called Snapchat+. The Plus plan includes pre-release, experimental and exclusive features, such as pinning your close friend as a BFF (best friend forever) and customizing the app’s icon. The new subscription plan will be launched in the United States, Canada, the United Kingdom, France, Germany, Australia, New Zealand, Saudi Arabia and the United Arab Emirates, with more countries to be added soon. Although Snapchat reported strong results in the first quarter, the company issued a weak revenue outlook for the second quarter due to the negative impact of the war in Ukraine. For Snap, Snapchat+ is a major step away from the revenue model dependent mostly on advertising. This is because macroeconomic conditions like supply chain disruptions, labor shortages and inflation are impacting advertising revenues. This Zacks Rank #4 (Sell) company’s shares have fallen 72.7% in the year-to-date period compared with the Zacks Internet-Software industry’s decline of 53.3% and the Zacks Computer and Technology sector’s decrease of 32.3% in the said time frame. Introducing Features to Boost User Engagement
Snap has been gaining momentum and user engagement among the youth, which have been helping it expand its subscriber base of over 332 million. The company is focused on introducing several features to retain existing users and attract new ones to its platform.
Snap has added a number of features, including the Tab feature on Friends and Discover to make its Snapchat platform more attractive to users and advertisers. Recently, Snapchat announced the launch of an accelerator program for Black creators, which will see Snap provide ongoing financial support, training and more to 25 emerging stars over the next year. The program is part of Snap’s 523 initiative, which provides support to small content companies and creators from underrepresented groups. Snapchat also has its Yellow program targeted toward entrepreneurs, who are building businesses, brands, and products that can contribute to human progress, and in combination, the company now has a range of initiatives designed to help those from less privileged backgrounds gain traction and build a career via the app. Earlier this year, Snap rolled out a feature that enabled users to share Alphabet ( GOOGL Quick Quote GOOGL - Free Report) owned, YouTube video links via the Snapchat Camera platform. With the integration of this feature, Snapchatters can directly access the video within the Alphabet’s YouTube app or any other mobile browser, with just a tap on the YouTube stickers available on the Snapchat app. Meta Platforms’ ( META Quick Quote META - Free Report) Instagram is also testing the same subscription plans but for creators only as of now. Instagram expects that with subscriptions, creators will be able to develop deeper connections with their most engaged followers and grow their recurring monthly income by giving subscribers access to exclusive content and benefits. Last year, Twitter ( TWTR Quick Quote TWTR - Free Report) announced the Blue subscription that offers ad-free access to other websites for $2.99 a month. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.