Snapchat kills licensing deals with publishers as ad rates decline

Snapchat kills licensing deals with publishers as ad prices decline

Snapchat will stop paying up-front licensing fees to its publishing partners for their Discover content, according to a report from Digiday.

The company has previously paid Discover partners an agreed-upon rate in addition for having their content on the platform, and then pocketed all of the ad revenue generated from their content. In new deals that Snapchat has been sending out, publishers will receive only ad revenue, three  – creating less financial risk for the app.

“While we don’t comment on the specifics of our financial deals with our partners, our goal in structuring these deals is to help our partners build long-term, sustainable business models on Snapchat,” a Snap spokesperson told Digiday.

Under the new deals, the app’s drastically slowed growth would mean less revenue for publishing partners. The app reported Q1 2018 revenue down 19 percent from the previous quarter, and ad pricing down 65 percent from the previous year.

Still, though, Snap is putting on a bold face and claims to not be worried. “We’re not really focused on pricing right now. We’re more focused on bringing advertisers into the platform and helping them understand our platform,” said Chief Strategy Officer Imran Khan earlier this month.

The company appears to be streamlining its content deals, effectively pushing a generic template-style deal amongst its partners. “What they’ve been telling people is that they don’t want to do too many bespoke deals anymore; they want to templatize everybody,” a source told Digiday.

It’s not clear how many partners have agreed to these new terms, but more than 90 media partners are producing content for Discover today.