After its introduction in September 2011 (Spiegel, 2012), Snapchat has grown to the third most popular social application platform (Mwpartners, 2014) behind Instagram and Facebook. In the Netherlands 72 percent of the Dutch teenagers (12-19 years) had installed the application on its smartphone and is capturing more popularity among other age groups (NU.nl, 2016). Snapchat is a application for smartphones, that allows users to share messages, photos and videos with friends that will be deleted after a few seconds. But what makes Snapchat so popular and how do they differentiate from other photo applications and social network platforms?
Snapchat’s users are motivated to create content. This is different with Facebook or Instagram, where users are more motivated to absorb content. Snapchat enables its users to share content that is only temporarily available. Therefore they are motivated to share their daily life, making the platform more personal. Additionally Snapchat’s filters make it more fun to share content in a creative manner. Facebook and Instagram try to adopt this personal aspect by integrating Facebook live and Instagram story. However, over time Snapchat created a large followers base, making it less attractive for its user to switch to another platform. Therefore it is difficult for Facebook and Instagram to compete in this area of social media.
But how did Snapchat capture such a large followers base? Like any other social media platform more value is created for its users, as more users join and enlarge the platform, also called a network effect (Katz and Shapiro, 1994). A platform is a two-side network that brings together two groups of users. To be successful it is important that you set your pricing right and subsidize one side of the platform and charge the other side (Eisenmann et al., 2006). Snapchat did this very well and subsidized the consumers, by making it able for them to use the app for free. By doing so they created positive same-side network effects, meaning that a growing amount of users on one side attracts more users on that side (Eisenmann et al., 2006). For this reason also major celebrities joined the platform, because in this sense they can connect better with their fan base. Because of this, Snapchat attracted many consumers, making it attractive for other parties to join the platform. This allowed Snapchat to create new features developed by third parties, such as goofy stickers, geo filters and fun lenses, making it for consumers more enjoyable to use and attractive to join. These features created positive cross-side network effects: more users on one side make it more valuable for users on the other side (Eisenmann et al., 2006). With its ‘Discover’ feature and large users base Snapchat even attracted major publishers, such as CNN, MTV, Vice, Comedy Central and many other parties. Even though the focus of the application is to share personal content, the discover feature enables consumers to absorb content that is relevant for them.
But what about the future of Snapchat now its popularity is increasing? The application already allows advertisers to send short commercials between “snap-stories”. Can it also change the way of how firms do business? For example Snapchat’s users can already get exclusive deals from Amazon that disappear in seconds (Tam, 2014). Furthermore Snapchat already changed the way of how people use their phone camera (e.g. shooting videos vertically and making “selfies” part of the “new” normal). The question is, can they push the boundaries of how consumers use their camera even more? With the introduce of its Snapchat Spectacle they allow its users to take and share content with sunglasses (Walano, 2016). Is it even possible that they are going to disrupt an entire industry? It is for other companies, maybe not yet a real competitor, important to not underestimate this (technological) developments, because otherwise they can be wept out of the industry just like what happened with Kodak. These are all interesting questions that cannot be answered yet. However Snapchat already build up a strong brand and left its mark in history. Now we have to wait and see what the future will bring.
– Eisenmann, T., Parker, G. and Van Alstyne, M.W. (2006) ‘Strategies for Two-Sided Markets’, Harvard Business Review, 84, 10: pp. 92-101.-
– Katz, L. and Shapiro, C. (1994) ‘System Competition and Network Effects’, The Journal of Economic Perspectives, 8, 2: pp. 93-115.
– Mwpartners (2014) ‘Snapchat is now the third most popular social network among millennials’, available from: http://mwpartners.com/snapchat-is-now-the-third-most-popular-social-network-among-millennials/ [3 October 2016].
– NU.nl (2016) ‘Snapchat steeds populairder onder twintigers en dertigers’, available from: http://www.nu.nl/apps/4327065/snapchat-steeds-populairder-twintigers-en-dertigers.html?redirect=1 [3 October 2016].
– Spiegel, E. (2012) ‘Let’s chat.’, available from: https://snap.com/news/page/7 [3 October 2016].
– Tam, D. (2014) ‘Amazon uses Snapchat to send exclusive deals’, available from: https://www.cnet.com/news/amazon-uses-snapchat-to-send-exclusive-deals/ [3 October 2016].
– Walano, R. (2016) ‘Snapchat Launches Spectacles, Sunglasses You Can Record Videos With: Here’s Everything to Know’, available from: http://www.usmagazine.com/stylish/news/snapchat-spectacles-everything-you-want-to-know-w441966 [3 October 2016].
