Snap, YouTube Highlight Strength in Subscriptions

It’s time for internet companies to report their quarterly results. One takeaway so far? While digital advertising is still most important for Snapchat and YouTube, subscription revenue is driving growth. Here’s the rundown:

Snap

The company’s subscription service, Snapchat+, now has 12 million subscribers, up from 11 million subscribers last quarter and more than double the same time last year. 

Even though subscriptions represent a relatively small amount of money for Snap, they are helping boost the company’s overall revenue growth in a meaningful way. To understand that, Snap’s advertising revenue rose 10% to $1.25 billion but the company was able to report an overall revenue increase of 15% to $1.37 billion thanks to non-advertising revenue of $123 million, most of which comes from Snapchat+.

Snap has found success with the $3.99-a-month service despite some problems. My colleague Erin Woo wrote a great piece in January that explained the appeal of Snapchat+, including a controversial feature that shows users how their friends ranked them. Snap later turned the feature off by default, citing concerns over user wellbeing.

As competition from TikTok intensifies, Snap’s user growth in the U.S. is still a nagging problem. While the number of people using Snapchat around the world grew this quarter, North American users have flatlined at about 100 million.