Snapchat has had a rough week – with app downtime angering hoards of streak-losing users, missed projections in their Q3 earnings report, plummeting stock prices, and millions of dollars in unsold Spectacles. But in hopes of a comeback, Snapchat is building a new Android app from the ground up, and recommitting themselves to independent content creators.
Let’s take a look.
Snapchat began their week with widespread downtime affecting the vast majority of app users. While the period of downtime lasted only a couple hours, it was just enough for many power users to lose their streaks.
Some Snapchatters are having trouble with the app 😓 We're looking into it!
— Snapchat Support (@snapchatsupport) November 6, 2017
— Abdifatah Mohamed (@AA_Mohamed10) November 6, 2017
The Earnings Report
Snapchat’s Q3 2017 earnings report was released on Tuesday morning, alongside a quarterly call with stakeholders. The company was expected to present $237 million in revenue, but fell short with just $207.9 million. The app also saw a decrease in user acquisition growth – reporting 178 million daily active users for a 2.9 percent quarter-over-quarter growth. This was the app’s lowest quarterly growth rate ever, falling well behind the 4.2 percent reported in Q2 and 5 percent reported in Q1.
After the earnings announcement, Snap’s share price dropped over 16 percent, bringing the trading price down to $12.65 from $15.12.
In his prepared remarks for the Q3 earnings call, CFO Drew Vollero confirmed that Snap Inc. is sitting on $40 million in unsold Spectacles inventory.
“Unfortunately, we misjudged the strong early demand for Spectacles and purchased more inventory than we now anticipate being able to sell,” Vollero said. “Moving forward, we will continue to be in the market place with Spectacles and expect modest revenue from the product line.”
Rededication to Creators
We all knew that Snapchat was losing ground in the ephemeral app space – but can they win it back? The company is hoping to do so with a new commitment to serving independent content creators, the lifeblood of their app. CEO Evan Spiegel talked about their plans.
“While we have made significant progress in our work to empower the creation of user-generated content from friends, and premium content from publishers, we have historically neglected the creator community on Snapchat,” Spiegel said. “In 2018, we are going to build more distribution and monetization opportunities for these creators in an effort to empower our creative community to.”
Finally, in an effort to win back some of the Android users that have inevitably switched to Instagram Stories because Snapchat on Android looks terrible, Spiegel announced the company is re-building their Android app from the ground up.
“To attract more Android users, we are building a new version of our Android application from the ground up that we will launch in select markets before rolling it out widely,” Spiegel said. “After seeing the results of increasing Android performance over the past few months, with significantly more Android users added than iOS users in September, we wish we had done this sooner.”