Snapchat, built on vanishing texts and selfies of people wearing floppy dog ears, has added TV-quality video to its roster. It’s part of a plan to balance the user-generated content that permeates the app with more premium video.
The company, which went public in March, is working with traditional TV networks like NBC, ESPN, Turner, and A&E on the so-called ”Snapchat Shows,” which are 3-5 minutes long and exist in the curated “Discover” section of the app. The networks fund and produce the shows, Variety reported. And Snapchat makes them available to its 166 million daily active users around the world.
The relationship puts Snapchat in a new role—almost like that of a cable provider like US services Comcast or DirecTV. But Snapchat doesn’t pay networks to license their channels like cable and satellite-TV operators do. And it doesn’t make money from subscriber fees, given that users don’t pay for access to Snapchat. Instead, Snapchat Shows earn revenue from advertising—three 10-second ads are currently allotted for each show—and the company splits that revenue 50-50 with the corresponding networks, the Wall Street Journal reported (paywall).
In that sense, the tech company is actually behaving more like a traditional TV network.
Snapchat helps its media partners develop the shows. It weighs in on every stage of the process, from the early business negotiations to green lighting and rolling out the shows, a Snap spokesperson told Quartz. These are jobs that usually fall to the networks and production companies in the traditional TV space. But who knows Snapchat and its audience better than Snapchat?
The company is also experimenting with developing and producing its own shows in house. Its first creation, a daily news program called “Good Luck America,” averaged 5.2 million viewers per episode in its second season to date, Variety reported. Other Snapchat Shows like “E! News: The Rundown” reportedly average around 7 million viewers per episode. (These numbers measure how many people tapped to watch, even if didn’t watch through, and therefore cannot be compared to TV viewership.)
The approach is a reinvention of the TV model for the mobile world. Other tech companies entering the TV space, like Facebook, are still following the old-school model of buying shows for their platforms. But Snapchat can get the networks to foot the bill because Snapchat Shows are short and far cheaper to produce than typical network shows. The cost of a Snapchat episode can range from $6,000 to more than $45,000, depending on the talent and production value, the Journal reported. A typical TV pilot costs millions of dollars. Snapchat also gives its media partners detailed data into how the shows perform, unlike platforms like Netflix that notoriously play their data close to the vest.
Snapchat says it isn’t vying to replace traditional TV. It views itself as extension to it, the Snap spokesperson said. Indeed, many of its shows are spin-offs or extensions to existing programming, like “The Voice on Snapchat,” which builds on NBC’s hit singing show, and “Watch Party: The Bachelor,” an offshoot of the popular ABC dating series.
Currently, Snapchat airs about one show per day on the platform. But by year’s end, it aims to be up to three per day, including animated shows, documentaries, scripted dramas, comedies, and daily newscasts, among others. It has more than 100 projects in development, including 20-30 that are being piloted to determine whether a full series should be ordered.
Netflix, by contrast, has about 1,200 series on its platform, including at least 30 originals. The company began developing its own series in 2013 with House of Cards, and has been swiftly adding new titles, from Orange Is the New Black to Stranger Things. This year, it plans to premiere 20 unscripted series and grow its lineup of originals to 1,000 hours, more than double what it had in 2016.