Snapchat is trying to figure out how to turn its 100 million-plus daily users into daily contributors to its bottom line, and it’s throwing all kinds of ideas at the wall to see what sticks.
Snapchat Tries Another Way to Make Money: More In-App Purchases
Snapchat is selling lenses now, too.
On Friday it started testing another: A “lens store” where users can pay 99 cents to transform their selfies by adding special effects or costumes to the image. The company has offered free lenses for a few months, and even tested its first sponsored lens last month with Fox Studios to promote the new “Peanuts” movie. But some of the original, popular lenses — like the one that allows users to “puke” rainbows — disappeared over time to make room for new designs. Well, now Snapchat is bringing them back for a small fee.
The store isn’t so much a destination within the app as it is a prompt to purchase a lens that’s no longer available for free. It’s the second type of in-app purchase the company has rolled out since September. You can also buy “replays” within the app, which allows you to rewatch a snap that you’ve already seen.
On the surface, in-app purchases seem like a small revenue driver compared to Snapchat’s more mature ad products, which can generate well over half a million dollars for just 24 hours in some cases. But the idea of charging 99 cents for anything within the app just shows how important revenue is for Snapchat — and how it’s still trying to figure out which revenue drivers may actually work. The store helps set a precedent for other in-app purchases down the road, too, which the company has hinted at in the past.
Snapchat is still working to live up to a $16 billion valuation, after all, and it didn’t get a glowing endorsement this week from investor Fidelity, which downgraded the value of the company stock it holds by 25 percent. Selfies can’t hurt.
This article originally appeared on Recode.net.
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