Inflation-concerned consumers may be looking to cut back on unnecessary subscriptions, but as Snapchat’s rapid subscriber growth suggests, many remain willing to pay a premium for that VIP feeling — especially younger generations.
Snapchat announced that now, one year out from the launch of its Snapchat+ subscription, which enables members to use new features before they get released and to test out experimental capabilities, the program has more than 4 million subscribers.
This figure may be only a fraction of a percentage of Snapchat’s global daily active user base (383 million as of April), but with each of those subscribers chipping in a few dollars a month, it amounts to hundreds of millions more in revenue a year.
Notably, Snapchat is cagy about the pricing of the program, noting that it “may vary in different countries and devices” and requiring consumers to go into settings to see what it would cost at any given time. Last year, when the program launched, the subscription cost $3.99 a month.
The subscriber count has grown quickly. Just about three months earlier, at the close of the first quarter of 2023, Snap was touting its membership base of “over 3 million,” meaning that in the last quarter alone, it added about 1 million members.
This growth is especially notable given that, throughout this inflationary period, consumers have been looking to cut back on their subscriptions. Research from last month’s edition of PYMNTS’ Subscription Commerce Readiness study, “The Subscription Commerce Readiness Report: The Loyalty Factor,” created in collaboration with sticky.io, revealed “the lowest recorded number of subscriptions per subscriber since February 2021.”
As of the survey, subscribers averaged only 2.6 subscriptions each. Plus, the study found that 57% of consumers had canceled at least one subscription in the past year because of cost.
Yet Snapchat has a key advantage in reaching subscribers — its young audience. Numbers vary, but reports from a range of sources show that the social platform disproportionately skews toward Generation Z and even younger, and these consumers prioritize subscriptions that bring them enjoyment.
Research from the April edition of PYMNTS’ and sticky.io’s study, “The Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” revealed that, while baby boomers and seniors tend to prioritize convenience and cost as the main reasons for subscribing to retail services, younger generations do so for enjoyment.
Plus, Snapchat’s subscription offering is not a retail product subscription. It offers consumers something even more in-demand among users looking to find their place in an ever-changing social landscape: exclusive access.
The subscription enables them visibility into who has rewatched their Stories, the ability to boost Stories so others are more likely to watch them, insight into how friends’ engagement with the app has changed, the chance to have replies to public figures’ content prioritized and more. When these young consumers are using Snapchat to conduct much of their social lives online, features like these can give subscribers the kind of advantage they crave.