People are Getting Over the Snapchat Update…

One month ago, Snapchat users were shocked with a new app design. The general response to the update was horrible. People were angry and confused.

The update caused many to post their outraged reactions, creating a spiraling negative effect around Snapchat. Many articles on how people were frustrated with the app came out and contributed to the decrease in share price. The worst impact to the company happened when Kylie Jenner tweeted “Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad,”. The day this tweet was published, Snapchat went down big. The tweet took 1 billion dollars off their market cap.

Our View:

We believe the market cap decrease after Kylie Jenner’s Tweet was ridiculous. Although Kylie Jenner has a huge following, her tweet did not stop people from snapchatting.  Also,  after Kyle Jenner made her comment, even she continued to use the app and posts frequently.

The Snapchat update was a huge change and may have scared a few users away. However, we believe the anger towards the update has mostly vanished, and people are used to it. When the update first came out many of our friends were disappointed and turned off by the remodel. As time went on, we saw all of our friends’ disgust for the update slowly fade away. Personally, we have completely adjusted to the new design.

The negative media attention surrounding the Snapchat update didn’t translate to fewer users. Many estimates show that little to no Snapchat users left the platform following the update. The number of daily active users only decreased a fraction of a percent. In conclusion, people don’t like change, but they learn to get used to it. That’s what has and will continue to happen with Snapchat and its remodel.

Could the Most Hated Snapchat Update Actually Boost the Companies Sales?

Although the snapchat update has received a lot of hate, could it still be helping their sales?

Recently, Snapchat is under fire as the response to their update has been anything but positive. With all the negative user reviews, one might  think that Snap would consider retracing its steps and return to its old platform. However, the company has shown no signs of this retraction as Ceo and Founder Evan Spiegel said, “We’re excited about what we’re seeing so far,” and continues stating “The best part is that even some of the complaints we’re seeing reinforce the philosophy [behind the design].” As you can clearly see, he completely disregarded the hate the update has been receiving and the 1.2 million people that have signed the petition to change Snapchat back to its prior form.

It leaves people asking the question, “Why does Snap keep the new update if no one likes it?”

The answer to this question: revenue.

Although Snapchat currently has 187 million daily users, it is and has been losing money for years.

Snapchat’s stock has finally started to rally as it posted record breaking fourth quarter earnings on February 6, 2018, of 285,693 million dollars, however, the company still lost 28 cents per share or 159 million dollars. Despite the hate regarding the new update, the update itself looks like it could continue the uptrend in Snap’s sales.

A lot of people have been outraged with the way Snapchat’s signature story feature is now positioned on the left side of the app which makes it much harder to rewatch stories. Personally, we don’t like it either, but will it make us and our friends stop using the app? No! The reason being is our streaks are way too valuable to throw away because of an update.

The new update now leads the consumer to the right side of the app, where the stories used to be. This whole side of the app is now dedicated to the discover section. This is where Snapchat makes most of their revenue, as there is a lot of sponsored content from companies, and many ads in between the content. Additionally, a slight but important new feature to the app is that when a particular story or headline is over, it doesn’t take you back to to the displayed section of news, instead, it goes right to the next popular story, headline, celebrity sighting, or sporting event, keeping the user engaged, and more importantly presenting them with more ads.

How will Snapchat’s revenue be affected by the new update?

We believe the new Snapchat update was designed as a way to increase ad revenue. While increasing ad revenue, this new update has received an echoing negative response from many Snapchat users. Will this lead to a significant drop in Snapchat’s huge daily user base? If so, will the new revenue model in the update make up for the lost users?

Let us know your thoughts on this bold move from Snap.

Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.