With the report Wednesday of a new investment from China’s Alibaba set to value Snapchat at $15 billion+, it’s clear that Evan Spiegel’s app has big ambitions. It might have made its name as the ephemeral messaging service of choice among the teen audience, but over the last year we’ve seen this initial goal being increasingly sidelined as Snapchat attempts to become the dominant name within the mobile media market.
Look at the top usage motivations among Snapchatters and it’s not hard to understand why there’s a shift taking place – or why Alibaba is among those lining up to add its money to the investment pile. GlobalWebIndex’s data shows that privacy is the least important reason that people use Snapchat (just 30 percent of users select it). Once upon a time, Snapchat’s privacy credentials might have mattered much more, but the fickle demographic at the core of its user base has long since moved on. Now, Snapchat’s biggest selling point is that it’s fun to use (69 percent).
All this means that Snapchat can’t stand still; its investors want to see proof of its much-touted monetisation potential, and its users want to be entertained on a constant basis. Hence, with the dust still settling after the introduction of its Discover channel for brands, Snapchat is now reported to be eyeing up media-rights deals with sports leagues and broadcasters (specifically, the NCAA and Turner Broadcasting) in order to bring sports coverage to its “Our Story” feature.
Starting with a “Story” about the NCAA Final Four, Snapchat will produce a curated selection of user “Snaps” that give fan perspectives on sporting events. Reports suggest that these broadcasts will come linked with brand sponsorships, creating revenue for the sports leagues, for broadcasters, and, of course, for Snapchat itself.
The opportunity for profit seems obvious – especially if we delve into the demographics of its user base in a little more detail. Although just 8 percent of U.S. Internet users aged 16-64 are Snapchatters, some 24 percent of 16-24s are using the platform each month. And this figure is closer to a third among teens (16-19s).
What’s more, many of these Snapchatters are sports-mad. GWI’s data shows that 45 percent of Snapchat users in the U.S. are watching basketball on TV. Football is even more popular – 6 in 10 U.S. Snapchatters catch NFL games on TV. And many will be able to provide front-seat Snaps from games – about 15 percent of U.S. Snapchatters say they attend NFL or Major League Baseball matches in person.
For Snapchat, then, this army of sports reporters making content that can be repackaged for broadcast to its users means one thing. And it’s the one thing that Snapchat cares about the most at the moment: money.
Jason Mander is Head of Trends at GlobalWebIndex.