Snap Inc. has attracted more than 3 million users for its Snapchat+ subscription service, which costs $3.99 a month and gives users early access to features such as a new artificial intelligence chatbot.
At its annual partner summit in its hometown of Santa Monica, California, Snap said the growth exceeded the company’s expectations, including adding about 1 million paying users over the past 11 weeks.
The service launched last year, but got a boost in February when the company added exclusive access to a chatbot called My AI, powered by OpenAI’s GPT technology.
“We never thought we’d grow to three million subscribers,” Snap CEO Evan Spiegel said in an interview.
“What we’re basically seeing is when we release new features, it gets more people excited about signing up or trying out Snapchat+. We’re really seeing good momentum with My AI.”
Snap will soon open up the My AI feature to all users, not just subscribers, the company said Wednesday.
Spiegel said at the event that his “medium-term goal” is to reach 10 million Snapchat+ users. The progress so far shows that Snap is making headway in a challenging area for social media companies: getting users to pay.
At Twitter, owner Elon Musk has been working hard to attract subscribers to the company’s Blue service.
Meanwhile, Meta Platforms Inc. began testing subscription packages on Instagram and Facebook in February, but has yet to disclose paying user figures.
Customers will also have access to Snapchat+ services through Verizon Communications Inc.’s +play platform. In addition to providing AI capabilities, subscriptions allow users to customize the look and feel of the app.
Like its social media peers, Snap is looking to offset a deceleration in ad revenue. The company’s overall sales growth stagnated late last year, and revenue is expected to decline in the first half of 2023.
Snap is responding to the recession by laying off workers and weeding out projects that are no longer seen as priorities. That means a renewed focus on efforts to grow user numbers and revenue, as well as augmented reality.
Snap launched Snapchat+ in June, making it available in a handful of countries including the US, UK, Germany and the United Arab Emirates. Even with its recent growth, it still represents only a small fraction of Snap’s revenue and user base.
At about $4 a month, 3 million users will generate just under $150 million in revenue. Snap had total revenue of $4.6 billion last year and has 750 million users.
The company is also considering ways for users to make money through the app.
Anyone over the age of 18 can now post stories publicly on Snapchat. That means it’s easier to become a creator and amass followers on the app. To attract more of these users, Snap says it will offer selected creators a cut of the revenue if ads are placed between Story posts.
