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Snapchat's Scripted Show Approach To Lure Black Teens

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Snap announced 12 new “Snap Originals” scripted shows in effort to regain its popularity with the very coveted but fickle black teen user group. African American teens are the first-movers in many ways when it comes to deciding what’s going to take-off on social media. Will these new shows be enough to get back in their good graces, impress investors and fend off Facebook’s territory poaching Instagram?

The Breakdown You Need to Know

Teenagers and their technology are inseparable with 9 out of 10 black teenagers using Snapchat , according to a survey by The Associated Press-NORC Center for Public Affairs Research. Episodes of Snapchat’s new shows will try to engage the group and include six-seconds of non-skippable advertising, keeping in line with its current format of shows. In a statement from Snap, the company claims viewership of its existing shows has tripled this year.

Competition is steep in this space as CultureBanx reported for example, Apple has ordered 17 original series, including one about Kevin Durant’s childhood, which is sure to appeal to the black teen demographic. The social media company plans on putting out new episodes of its shows daily, but they’ll be short averaging five minutes each, to stay in the sweet spot for mobile viewing.

African American teens are more likely than their peers to have access to smartphones, which could explain why they’re the biggest and most frequent users of mobile-friendly social media apps Snapchat and Instagram. “It speaks to the level of embeddedness of the technology in black youth’s lives and their willingness to move into new platforms more quickly than their counterparts,” said Amanda Lenhart, the lead researcher on the survey.

Video Ad Race Mindfulness

Shares of Snap have fallen 52% since the beginning of the year as the company struggles to attract new users. They’ve lost nearly $250 million and 3 million daily users in the last quarter. Earlier this year, Instagram said more than 400 million people used its Stories feature. This amount is nearly twice that of Snapchat's 188 million daily active users it reported at the end of the second quarter.  

Snap has made inroads into video advertising but still has a small slice of the overall market. It’s nemesis Facebook will command 24.5% of all video ad spending this year at $6.81 billion including Instagram, according to eMarketer. They also estimate Snapchat’s U.S. video revenues will grow 19% to $397.3 million this year

In MoffettNathanson’s recent analyst note they wrote Snap was falling “woefully short” of its goal to be profitable, estimating the company will lose more than $1.5 billion next year. Also, they mentioned the company was running out of cash and may need to raise new funding next year. Additionally, Evercore ISI analyst Anthony DiClemente stated the company would lose one million daily active users in the third quarter and slashed his price target to $7 a share from $9.

Snap seems to think that morphing into more of a TV network will help save the company. It might not be a bad move since they will be able to command more money in ads for their scripted shows than their general lackluster user generated content.