Snapchat Loses 3 Million Daily Users
Though Snapchat’s new user rate has been declining in recent months, it has never experienced an actual loss of users… until now. In the company’s latest earnings report, it was revealed that the company lost three million daily active users in the second quarter of 2018, from 191 million down to 188 million.
However, it’s not all bad news. The company also beat Q2 revenue projections, bringing in $262 million as compared to an estimate of $250.43 million (based on $1.40 average revenue per user).
Many factors led to this eventual exodus of users, including Snapchat’s much maligned app redesign earlier this year and plenty of competition from apps like WhatsApp and Instagram, which are both now owned by Facebook.
Instagram added 300 million users from Q2 2017 to Q2 2018, followed by Facebook at 228 million and WhatsApp at 200 million. By comparison, Snapchat added only 15 million daily users over the past year.
Evan Spiegel, Snap chief executive and co-founder, said, “We feel that we have now addressed the biggest frustrations we’ve heard and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people.”
With the future of Snapchat in question, the next year will be full of trials for the comparatively young company.
Only 12% Of The Music Industry's Revenue In 2017 Went To Actual Musicians
Artists are getting paid more than ever for their work, but the reality is that it’s still a very paltry sum. According to a new report published by Citigroup, only 12% of the $43 billion generated by the music industry in 2017 was delivered to artists for their work. This is a significant increase from just 7% in 2000, but it’s still not enough.
The report reveals that the bulk of the money is going to the middlemen: tech companies, radio stations, and record labels.
It also reveals that artists have turned to live performances more than streaming as their main source of income, preparing massive, month-long tours that keep them on the road and playing gigs. We’ve seen repeatedly this year that artists have come out to criticize this model of earning as it has the potential to be detrimental to mental health.
Citigroup does offer three possible solutions to the disparity in pay, as summarized by Pitchfork, “through vertical integration of existing businesses (example: concert promoters merging with distribution platforms like Spotify), horizontal integration (distribution platforms merging with each other), and ‘organic’ vertical integration (distribution companies such Spotify entering the record label space).”
The Music Modernization Act could potentially help, as well, but it will ultimately require a massive shift in policy and regulations to fairly distribute revenue throughout the music industry.
Read the whole 88-page report from Citigroup here.
EDM Industry Drops In Revenue for First Time In Years
EDM continues to make huge waves with artists Marshmello and ODESZA taking over main stages at traditionally non-EDM festivals, and festivals like Ultra and EDC Vegas continually drawing in hundreds of thousands of people each year, but it’s not all sunshine and roses. According to the new business report at this year’s International Music Summit in Ibiza, EDM revenue overall fell 2 percent last year.
EDM’s 2 percent fall is a year over year decrease, coming off 2016. Global EDM revenue last year was $7.3 billion, down from $7.4 billion in 2016. The report found that EDM revenue fell 0.5 percent in the US and 1.5 percent in Canada last year. Also, the report found EDM revenue fell 0.6 percent in Germany and 3.8 percent in the UK last year. Meanwhile, all recorded music revenue actually grew 12.8 percent last year.
What is causing these decreases across the board? For the US, the report mentions that EDM crossover tracks are being classified as pop or R&B. So, tracks from artists like The Chainsmokers or Zedd may not fall under the EDM revenue umbrella. The report also points out that EDM revenue increases in places like the US and Germany were huge the past few years. Therefore, it’s only natural such rapid growth would slow at some point.
Despite the bittersweet news, the report has some positive thoughts. The report found that EDM is growing quickly in Asia, specifically in South Korea, China and Taiwan. Plus, the report argues that if EDM continues to be a part of every segment of the music industry, it could be worth $9 billion by 2021.
The 2018 IMS business report released during IMS Ibiza this year. Click here to read the full report.
Unskippable Ads Have Come To Snapchat
You’re on Instagram, scrolling through your friends’ stories, and you reach an ad… you tap on the right and move on, that’s it. Now consider the same situation situation on Snapchat: you’re scrolling through your friends’ stories, and you reach an ad… boom, six seconds, and you can’t skip it. What are you more likely to do? Keep watching stories, or exit out of the app?
In an attempt to generate more revenue after seeing its stock price drop by more than 50 percent in a little more than a year, while taking a $40 million loss on unsold Spectacles, Snapchat has introduced the new ads to its service.
The good news is that if you just use Snapchat for chatting (but let’s be real, who does this when options like Kik and WhatsApp are available), you won’t ever see these ads. In fact, for now, you won’t see them scrolling through your friends’ feeds, either. The ads will be placed in between videos in the “Shows” section, which features longer-form videos produced by ESPN, NBC, Viacom, and others.
Gizmodo speculates that unskippable ads could pave the way toward a premium subscription for Snapchat users. However, the possibility remains that Snapchat could drive away more users than the revenue it generates with the new ads.
Worst of all, the ads don’t contain any hyperlinks or relevant information within the app. “So in the event that you actually see an ad for something you want,” writes Gizmodo, “you’ll still need to leave the app and resort to a Google search to learn more.”
Seems like one step forward, and two steps back.