Snap Inc, the parent company for Snapchat might be getting ready for its IPO listing towards March, but it looks like the app is facing a serious threat from Instagram. According to a report on TechCrunch by Josh Constine, Instagram Stories, which is a copy of the feature on Snapchat, has resulted in a sharp drop in views for the Snapchat stars and audience.
The TechCrunch report relies on “analytics providers, social media celebrities, and talent managers,” who told the website that Snapchat Stories have declined; both in views and the number of people posting original content. The decline is between 15 to 40 per cent in views. On Snapchat you can see how many people have viewed your ‘Story’ as well. In contrast, the report highlights that influencers and social media celebrities are seeing a sharp rise in Instagram Stores with the views going up massively.
In January this year, Instagram reported that it has 150 million daily active users, nearly half of the total daily active users on the app. Instagram has over 500 million monthly active users, and 300 million daily active users. For Instagram, the boost in usage of Stories will mean more advertising and revenues. According to eMarketer, 74 per cent of US companies plan to use Instagram this year, up from 53 per cent who used it for marketing in 2016.
The report on TechCrunch also points out people are posting less on Snapchat, which should be worrying for the messaging app, that has relied on the success of Stories for its popularity. The report also highlights how Snapchat’s end of auto-play feature for Stories could have resulted in a drop in numbers. On Snapchat now, users can create their own playlist in order to watch stories, but it means binge story-watching is impacted.
While Snap Inc didn’t comment for the report, it looks like content creators are turning away from Snapchat, which is not such great news considering the upcoming IPO. The report quotes, Nick Cicero, CEO of creative studio and social video analytics platform Delmondo, as saying,”Overall, from August to November 2016, the average unique viewers per Snapchat Story has decreased about 40%.”
For Snapchat, Instagram is not the only competition to worry about. Facebook is already testing its own version of Stories in Ireland, and just like Instagram, these Stories will be displayed on top of the News Feed. It doesn’t help that Snapchat is still an incredibly complicated app to understand for most users above the age of 30.
Facebook owns WhatsApp, Messenger, and Instagram; the first two have 1 billion monthly active users each, while Instagram is at 500 million. WhatsApp is also exploring a ‘Stories’ style feature, while Messenger has been redesigned to look a lot more like Snapchat with the focus being on the camera. As Snap Inc gets ready for its IPO, it will face closer scrutiny, especially around its numbers and future growth prospects in international markets.