Snapchat is planning to switch up the payment terms of its Discover section, Recode reports — but that might not be a bad thing if it provides publishers with a little more certainty about their revenue from the platform.
Instead of sharing ad revenue that section produces, Snapchat wants to pay content partners a flat license fee up front and keep the ad money for itself. It’s the same model that TV networks use when they buy programming.
That’s a switch from the terms Snapchat has offered since it launched Discover in 2015. Up until now, it has let publishers sell ads against their own content, and Snapchat has also sold ads against the same content using its own sales team. Splits have varied depending on the deal and who sold the ads.
Snapchat Discover is only open to around 20 publishers, including BuzzFeed, Cosmopolitan, The Wall Street Journal, Food Network, and the NFL. While numbers have ebbed and flowed, publishers have generally raved about the amount of traffic they get from Snapchat: In September 2015, for instance, Snapchat was BuzzFeed’s third biggest traffic source, and the company said in June that its Discover video views were up 33 percent this year. Vox has a deal with Snapchat to feature content from all eight of its publishing brands on its Discover channel, and created a “Snapchat Studio” this year.
Snapchat has already tweaked its Discover payment model: The Information reported in May that Snapchat was already requiring some publishers with Discover channels “to pay Snapchat a guaranteed minimum amount of money over a specific time period.” Then, earlier this month, Snapchat updated its app to make publisher content much less prominent. It’s unclear whether the publisher payments reported by The Information would go away with a new flat licensing fee, and different publishers might be able to negotiate different deals. But if Snapchat is already making Discover content less visible on its platform, then a flat license fee could conceivably be a steadier source of income than ad revenue.
Still, the move raises the same old concerns about giving platforms too much control over publishers’ content; this isn’t a fight that’s going away any time soon.
Not sure why @Recode frames as bad for publishers. Ad model doesn't work. Licensing definitely could on right terms. https://t.co/dQ53meapuS
— Jessica Lessin (@Jessicalessin) October 19, 2016
Snapchat wants to stop sharing ad revenue with media partners. Except that was a huge reason many signed on… https://t.co/xzmKNYGMNK
— Elana Zak (@elanazak) October 19, 2016
Control your platform.
Control your platform.
Control your platform.
Control your platform.
Control your platform.https://t.co/gDUXGkmFs6— Aram Zucker-Scharff (@Chronotope) October 19, 2016
