Snapchat+ draws in 4 million paid subscribers after first year

Snapchat's premium subscription service has garnered four million paid users in just its first year. Yahoo Finance Live checks out Snapchat's stock performance and how the app stands out in the social media landscape.

Video transcript

[AUDIO LOGO]

JOSH SCHAFER: Welcome back to "Yahoo Finance Live." Josh Schafer here with Alexandra Canal and Seana Smith. We are talking about some of our favorite trending stories from the day. And I want to start with Snapchat, guys. Interesting to see what they're doing with paid subscribers right now. So it's been a year since Snapchat came out with Snapchat Plus, paid subscriber network that they have. And they've now reached over 4 million subscribers that are paying $4 a month for Snapchat Plus.

Personally, I was kind of surprised to see it, to be honest, because I don't know how often you guys use Snapchat. I use it a little bit. I certainly have never considered the plus option. But it seems like something when you overall, when you think about the business, when you think about Snapchat trying to get revenue outside of just ads to be able to pick up 4 million paid subscribers and start to build out that network a little bit, Seana, is certainly important for where the company is headed.

SEANA SMITH: It's very important. It's interesting that you were impressed by that number, because when you put in perspective their daily active users, 375 million. So they were only able to convince 4 million of those users that it was worth spending $3.99 a month. And $3.99 in a month, when you compare it to many of the other subscriptions that are out there, what you're playing on a monthly basis, is cheaper.

But I think the real problem is what you get with that subscription. It's not enough.

JOSH SCHAFER: You don't really get anything.

SEANA SMITH: You don't get much--

ALEXANDRA CANAL: Is there a mental feature?

SEANA SMITH: I was going to say, yeah, what is it? Like up to 20 different filter options I believe that are exclusive to those who use Snapchat Plus. I think it's also just indicative of what's going on within that industry, right, when you take a look at the other social media giants, what they're doing, relying more on subscriptions to increase their revenue. Snapchat making a go at it. I don't think it was the best attempt, but I think they can build on it.

JOSH SCHAFER: Right.

ALEXANDRA CANAL: Yeah, totally. And look, I do think there is interest in Snapchat as a social media platform. I use it only with a certain group of friends. We just send pictures to each other back and forth.

SEANA SMITH: Can we use it for texting? Like texting?

ALEXANDRA CANAL: Yeah. The younger generation, yes.

JOSH SCHAFER: Younger than me, though, too. So that's like college age and like high school, I think, is like where that's most popular I've found. So that's like even we're talking like early early. And then those kids maybe aren't necessarily paying yet to be subscribers either. I think that's an interesting part when you think about this as well. When your demographic--

ALEXANDRA CANAL: True. If you're younger consumer, you probably don't want to pay for anything that you use.

JOSH SCHAFER: Right. Unless you have your parents paying for it. But when you start talking about someone that's probably like 21 or younger using the service, I think it's interesting to think about, you know, if they stay with it if they are still texting on Snapchat and using it as constant communication in five years when they become someone that subscribes to more services. Maybe that helps it out. I'm not really sure, but I do agree, right now, I don't care about getting more filters. I don't care about pinning my best friend on Snapchat. It's not really--

SEANA SMITH: To me, the whole issue with Snap-- and I don't use it, so obviously this opinion does not weigh or it doesn't really hold much weight, I should say. But my problem is that there's not enough to entice you to use it on a daily basis in terms of all the other social media platforms that are out there right now. What you are using where you're giving up snap at least the time, I would potentially allocate to Snap.

To what else is out there, they're not being innovative enough in order to really expand their daily active users, which is so critical to grow the business, which is why one of the many reasons why the stock is still well off, over 80% off, the highs that we saw not too long ago.

ALEXANDRA CANAL: And I think your point is valid. You need other people to use it in order for you to use it. And that is a really important factor there, yeah. On the year, it's off about 16%. I believe it's up year-to-date. But still, compared to where it was it's just really gone downhill. And, you know, all of us were not subscribed to Snapchat Plus.