Snap Subscription Service Tops 5 Million Users, Halfway to Goal

Snap Inc. has gained more than 5 million subscribers for its paid service, an offering that gives users early access to new features like an AI-generated selfie maker for $3.99 a month.

Snapchat is part of a broader strategy shift the company made last year to help generate new moneymaking opportunities. (REUTERS)

Snap Inc. has gained more than 5 million subscribers for its paid service, an offering that gives users early access to new features like an AI-generated selfie maker for $3.99 a month.

Snapchat , the subscription product, is part of a broader strategy shift the company made last year to help generate new moneymaking opportunities. Adding a paid option for the video-sharing app was a notable move in a social media industry where apps have historically been free. Snap's bet seems to be working, with the latest subscriber number jumping from the 3 million figure disclosed in April.

Snap has released a stream of exclusive features to subscribers. Some enhance the everydaySnapchat experience, like custom wallpapers for chats with friends, or the ability to pin a conversation at the top of the inbox for easy access. Others, such as first access to Snap's AI chatbot and its artificial intelligence selfie generator, are exciting new tools users want to play with on the app.

“We've seen with Snapchat that people are willing to pay,” Jack Brody, Snap's vice president of product, said in an interview. “They're excited to receive early access to experimental, exclusive features, and the more that we bring to the table, the more likely that is to be true.”

At about $4 a month, 5 million users would generate an estimated $240 million a year. Snap reported a total of $4.6 billion in revenue last year and has approximately 750 million monthly users. While small compared with the company's annual sales, the money generated by the subscription service can help offset the investment in new features — particularly in areas like AI-based tools.

Snapchat launched in June 2022 after the broader social media industry began trying to combat a slowdown in ad revenue. Amid job cuts and a companywide shift to prioritize new revenue-generating opportunities, artificial intelligence and augmented reality tech, Snap rolled out the paid offering.

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Snap has said that sign-ups for Snapchat have exceeded initial expectations. Earlier this year, Chief Executive Officer Evan Spiegel said his “medium-term goal” is 10 million users.

Snap has led a recent wave of paid offerings among social media companies and has more quickly released notable features. Meta Verified from Meta Platforms Inc. gives people a verified badge and has promised increased reach at a cost of $11.99 per month — $14.99 if you pay through an iOS app. At X, formerly Twitter, owner Elon Musk said again this week he is considering applying a universal membership fee to help the company weed bots off the platform, though he's struggled to persuade users to pay.

“The broader the suite of products we offer, the more likely we are to retain subscribers,” Snap's Brody said. “They might join for a specific feature that we recently rolled out, but then they see the 20-plus features that we've introduced overall, all of which play a role in making sure that this becomes an increasingly valuable service over time.”