Calm Down, News Media - Snapchat Is Not Failing
The media has had a field day, following the IPO of Snap Inc. The camera company is either “running on old ideas” by reportedly working on a drone, or at the worst, you and “all your friends” are leaving Snapchat.
Full disclosure - I rarely use Snapchat myself. Like many others, I found it more logical to use Instagram Stories and consolidate the platforms I personally used. And in the past, I have been guilty of writing these kinds of heavily skeptical opinion pieces - plucking the worst elements of a social network and condemning it based on the fact Wall Street valued it at many billions of dollars.
But as someone who uses it regularly, as Entertainments Marketing Co-ordinator for Nottingham Trent Students’ Union and a strongly opinionated social media nerd, I believe I can add balance to this wide array of negativity.
To summarise the news, Snapchat’s parent company Snap went into the Stock Exchange - the IPO priced shares between $14 and $16, giving them a valuation of $22.2 billion. However, that price jumped up 44% to $24 on the first day of trading, bumping that to roughly a massive $33 billion.
Social networks always have a greater implied value than physical value - through the massive customer databases and potential advertising worth. Analysts will scratch their heads and the monumental losses these companies make for the first few years and turn that into doom and gloom, but I’m here to change the narrative.
We’ve tried it before, news media, but we seem to be in a Groundhog Day-esque scenario where we forget how wrong we always are.
Let’s dive into Ashley Carman’s piece for The Verge first, discussing how the recent rumours of a Drone suggest Snap are going against their ideology of “reinventing the camera.” While this may be true in the grander scheme of there being drones already in the market, it just depends on what Snap want to make here.
If they go in the direction of Spectacles, it will be a reasonably priced fashion statement that won’t compare to the big boys - but will actually be affordable. And in all fairness, let’s assume this is (in the words of one particularly orange man) fake news. It wouldn’t be the first time a company has invented a product they’re working on, just to drive some positive PR and increase investor interest.
Finally, CNBC’s Owen Williams’ piece - waving a farewell to the “hostile” service that “doesn’t offer anything unique.” I can see his thinking here, but it’s an opinion that comes with some real misunderstanding of the service.
And I’m in the same boat. I am too old to get Snapchat. To me, the “me too” Instagram Stories is just a nicer (and simpler) user experience, and my social circle has also moved to this platform too.
However, with a 72% adoption rate, Snapchat is the most-used social media platform amongst 12-24-year-olds. They are posting over 8,000 snaps every second. That, to me, does not look like a “hostile” service - it just looks like one we may not get.
It’s big with a younger audience for a few reasons - namely, it’s perfectly millennial brand representation and the fact that most people use it as a unique channel to communicate their most narcissistic selves (a.k.a the best social media content). This leads to the somewhat confusing design becoming more of a personality formed by the app that, much like marmite, you either love or hate.
Don’t let your distaste for metaphorical yeast extract-infused spread cloud your judgement, and don’t let the idea of something that’s been done before make you assume a company’s ran out of ideas. Grab a crumpet with some jam, put the kettle on and make a cracking cuppa before you condemn.
P.S. Ashley, yes they should do a Snapchat phone!