Snapchat wants to be like TV, and publishers need to adapt.
That’s the message from the news that Snapchat no longer wants to share ad revenue with its Discover media partners, according to a report from Recode. Instead, the company will pay licensing fees for the content and keep all the ad revenue — the approach TV networks take.
Snapchat’s new terms will have a seismic impact on media companies that have dedicated significant resources to Discover. While a licensing fee means guaranteed income, it also means a ceiling on how much money publishers can make on Discover. Bigger media companies that don’t need Snapchat’s money — just its audience — will be fine. Smaller publishers, however, might soon extinguish their Snapchat teams, or at least use Snapchat’s offer as a bargaining chip to wrestle money from other platforms.