Snapchat Reaches Halfway Mark of 10 Million Subscribers

Snap Inc. has successfully attracted over 5 million subscribers to its paid service, which grants users exclusive access to new features such as an AI-powered selfie creator for a monthly fee of $3.99.

Snapchat, a subscription product, is part of a broader strategy shift the company made last year to help create new monetization opportunities. Adding a paid option to the video sharing app was a significant step in the social media industry, where apps have historically been free. Snap’s bet seems to be working, with the latest subscriber count jumping from the 3 million announced in April.

Snap has released a bunch of exclusive features for subscribers. Some enhance the everyday Snapchat experience, such as custom wallpapers for chats with friends or the ability to pin a chat to the top of your inbox for easy access. Others, like first access to Snap’s AI chatbot and its AI selfie generator, are exciting new tools that users will want to play with in the app.

“What we’ve seen with Snapchat is that people are willing to pay,” Jack Brody, Snap’s chief product officer, said in an interview. “They’re excited about early access to experimental, exclusive features, and the more we bring to the table, the more likely that will be.”

At around $4 a month, 5 million users would generate an estimated $240 million a year. Snap’s total revenue last year was $4.6 billion and it has about 750 million monthly users. While the money generated by the subscription service is small compared to the company’s annual sales, it can help offset investments in new features — especially in areas like AI-based tools.

Snapchat launched in June 2022 after the wider social media industry began trying to combat slowing advertising revenue. To prioritize job cuts and company-wide change around new revenue-generating opportunities, artificial intelligence and augmented reality technology, Snap introduced a paid offering.

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Snap has said that Snapchat signups have exceeded initial expectations. Earlier this year, CEO Evan Spiegel said his “mid-term goal” is 10 million users.

Snap has led the recent wave of paid offerings among social media companies, releasing major features more quickly. Meta Platforms Inc.’s Meta Verified gives people a verified ID and has promised increased reach for $11.99 a month — $14.99 if you pay through the iOS app. At X, formerly Twitter, owner Elon Musk said again this week that he is considering a universal membership fee to help the company weed bots from the platform, even though he has struggled to get users to pay.

“The wider variety of products we offer, the more likely we are to retain subscribers,” Snap’s Brody said. “They may connect to a specific feature that we recently rolled out, but then they’ll see over 20 features that we’ve rolled out overall, all of which contribute to making this an increasingly valuable service over time.”