How to Turn Down a Billion Dollars

by Billy Gallagher

  In October 2016, the month before Election Day, Democratic candidate Hillary Clinton appeared on Hamby’s Good Luck America Snapchat show for an interview. A week before Election Day, 4.4 million Snapchat viewers watched Good Luck America as Hamby spoke with President Barack Obama about the importance of voting. Republican nominee Donald Trump declined an interview request from Snapchat. Trump would only join Snapchat after he defeated Clinton. He would use it to snap special events like his inauguration.

  In December 2015, a shooting in San Bernadino, California killed fourteen people and injured seventeen more. As the tragedy unfolded, Snapchat created a live story open to everyone in the United States. The story brought viewers photos and videos from the scene as well as narrative developments and statements from authorities. It brought users citizen journalism, aggregated and narrated by professionals.

  Internally, Snapchat calls everything it produces “content,” and Hamby’s crew follows suit, but the intentions of his team are clear: to use the platform to mix high-quality professional journalism with citizen-journalist-produced documentation of breaking news stories. Snapchat has the potential to broadcast stories curated from users on the ground at the core of the action. But it remains to be seen if users want hard-hitting news in the same app that they employ to send videos of themselves vomiting rainbows to each other.

  Media companies that haven’t been granted a sacred spot on Snapchat Discover have been trying to use the Stories feature to build an independent audience. If users don’t want to get their political coverage from Hamby’s Good Luck America, maybe they would from The Washington Post’s Snapchat story. Snapchat still wants Stories to be intimate, so discovery of news organizations is still very difficult, hampering their growth. Most of them are still experimenting and both trying to develop a following and figuring out how to use the platform. Monetization plans are far off, if they even exist. When viewers click on a Snapchat Story, they have no idea what they’re about to watch—there’s no headline or teaser to urge them to click. So the only real lever media companies have to make users come back every day is to consistently make good content.

  As it does for users with messaging, Snapchat also offers publishers unparalleled intimacy. Mic.com, a millennial-focused media company, posted a Snapchat story on mental health awareness and left its messages open to its thousands of followers. Readers’ reactions came flooding in. Unlike comments and replies on most social media, each one of these replies was a one-on-one dialogue between Mic and a reader. Some wrote that they were severely depressed and didn’t know what to do. Editors at Mic connected them with counseling resources and kept tabs on them, messaging them regularly to check in on them. The letter to the editor became an email, then a Facebook comment or tweet, and now it was a Snapchat.

  Snapchat’s first in-house content began with Live Stories at the Electric Daisy Carnival in Las Vegas. It progressed to capturing interviews with candidates vying to be the leader of the free world. Snapchat was growing up.

  CHAPTER THIRTY

  DISCOVER FALTERS

  JUNE 2016

  VENICE, CA

  Despite its highly anticipated launch, it was clear just months later that Snapchat Discover was not working. Evan had high hopes as publishers signed on for the next big thing in journalism, and indeed, the lineup was impressive, featuring some of the biggest names in media, like CNN, Comedy Central, Cosmopolitan, and ESPN. In spite of the lineup, user traffic to Discover had dropped off 30 to 50 percent since the January 2015 launch.

  In July 2015, Snapchat redesigned Discover. Some believed that users were ignoring Discover because it wasn’t given a prominent location. To solve this problem, Snapchat added little icons for Discover to the top of the Stories page, which users visited daily.

  The design change gave Discover channels more visibility in Snapchat and boosted publishers’ traffic significantly. But Snapchat was far from done with changes. In late July, six months to the day since Discover launched, Snapchat killed Warner Music Group (WMG) and Yahoo’s Discover channels. Yahoo’s Discover editions opened with Katie Couric sitting behind an anchor’s desk, reading into the camera like a classic news broadcast. Snapchat and Yahoo, which worked out of the same building in New York, met several times to work on the latter’s ratings. But Snapchat offered Yahoo very little data, simply telling them they were in the bottom rung of Discover channels by viewership.

  Evan had hoped Warner Music Group could make music videos cool again on Snapchat by asking, “Is there a way here to re-create MTV’s Total Request Live?” WMG’s Discover channel was neither able to capture the nostalgic feelings Evan had for MTV nor draw in Snapchat viewers. Few Snapchat users even knew what WMG was, forcing the company to add “Warner Music” to the stylized W icon it had used since the 1970s.

  When Snapchat kicked WMG and Yahoo off Discover after six months and killed the in-house-created but underperforming Snap Channel a few months later, the message was loud and clear to publishers: Snapchat would not waste valuable space on underperforming channels. In spite of this Darwinian approach to the platform, media companies continued to push hard to get a spot on Discover’s limited real estate. Snapchat soon announced replacements for Yahoo and WMG: iHeartRadio would take the music spot, while BuzzFeed would take Yahoo’s spot. Snapchat and BuzzFeed managed to work out the issues that had caused BuzzFeed to drop out right before Discover’s launch.

  In November 2015, Snapchat hoped to boost traffic by letting publishers share links that took readers directly to their Discover content. On mobile, these links either led a reader to the publisher’s Discover page in Snapchat or to a page to download Snapchat. On a desktop, the links led users to a QR code that they could scan on their phone to open the content.

  Despite shutting down its Snap Channel, Snapchat still made original content opportunistically. Stephen Colbert starred in a five-day miniseries on Snapchat before his debut on The Late Show. Nick Bell’s content team produced a Year in Music review at the end of 2015, dedicating each day to recapping the year’s big stories for a different music genre. Spotify signed on to sponsor the entire series.

  Snapchat also kept signing up new partners for Discover, from established newspapers like The Wall Street Journal to upstarts like the women’s lifestyle publication Refinery29 and the mobile-focused food media startup Tastemade. Evan initially agonized about adding channels, because the jump from twelve to fifteen channels added another row that didn’t fit neatly onto one phone screen. But the extra content for users was ultimately worth the aesthetic sacrifice. Snapchat brought on do-it-yourself startup Brit & Co. to produce special holiday Discover editions for Mother’s Day, Father’s Day, the Fourth of July, Halloween, Thanksgiving, and Christmas.

  Earning a spot on Discover could be transformational for startup media companies. Tastemade raised $40 million in venture capital and brought on twenty new employees after it was added to Discover. The company has studios in Santa Monica where cameras are propped at ninety-degree angles to shoot footage specifically for Snapchat. One of the company’s sets is a 1950s-style kitchen with the furniture arranged to fit as much as possible into the camera’s narrow vertical frame. Tastemade shoots videos for other platforms as well but marks the TV monitors in its studios with black tape to show Snapchat’s frame. The startup tries to film as much as possible in the middle third of the frame so that it can be easily ported over to Snapchat. At Refinery29, a female-focused media startup, a team of ten puts fourteen pieces of content on Discover every day.

  But too much of this content, not just from Tastemade and Refinery29 but from all Discover publishers, was fluffy clickbait. Snapchat had designed Discover to be the antithesis of clickbaity nonsense. But Discover partners felt the heat as Snapchat demanded performance, and they catered their content to what they believed the young teenage audience wanted. BuzzFeed, the most digitally savvy of the publishers on Discover, should have one of the better channels; yet it features none of its viral conten
t or serious reporting. Instead, BuzzFeed Discover articles run the gamut from “19 Delightful Dog Pictures for Anyone Who Is Stressed Out” to “What Does Your Vagina Look Like?”

  Given the structure of Discover, which catered to bored, multitasking young people, long form, investigative journalism and breaking news updates don’t really work. And given the teenage audience, many publishers unimaginatively started publishing fluffy pieces. Ideally, they would be producing stories that felt more like Snapchat Stories and Live Stories—a more raw, on-the-ground, unfiltered look at interesting events. But that aesthetic is very tough to nail—especially from a media office in New York—and very few reporters, even young social media editors and community managers at these companies, truly understand Snapchat and its users.

  From the beginning, it was clear that without headlines and links, Discover publishers couldn’t rely on gimmicks to drive traffic. They would have to consistently produce good content to develop a loyal audience. This was supposed to be a good thing—freed of the incessant stream of Facebook and Twitter, journalists could get back to making pure, great content that users loved. The problem, of course, was that the content was actually crap. But we can’t pin all the blame on publishers. Snapchat spent years building a distinctive brand that made it difficult for Facebook to copy; but this same youthful, fun aesthetic made it difficult for Discover, Snapcash, and other serious endeavors to work. Teenagers didn’t want to use the same app to send dumb drunk photos to friends and get serious world news. And as much as Snapchat thought they might be starting a revolution, they didn’t believe their own hypothesis enough. Discover still placed too much emphasis on the publishers’ brands. But users didn’t care if the CNN logo was popping up in Discover. They cared about individual stories.

  Discover wasn’t necessarily a failure outright. Some channels continue to do very well on it. Cosmopolitan does the best with over four million daily unique views, and the Daily Mail isn’t too far behind. Other publishers run their Discover channel at a net loss but feel that they have to be there to remain relevant to younger readers. But overall, Discover has not had nearly the same outsized positive impact on the company’s growth and potential that Live Stories, geofilters, and lenses have had.

  In June 2016, Snapchat unveiled a second redesign of Discover, trying to address some of these issues. The new Discover scrapped the old design, which simply showed each publisher’s logo, and replaced it with a new tiled layout that let publishers include an image and headline for the day’s edition, along with their logo. Users could also subscribe to publishers’ Discover channels, which would place new editions from that channel below friends’ updates on the Stories page. But by far the most significant part of the redesign is that it combined Discover and Live Stories in one place. Previously Discover channels had small icons at the top of the combined friends’ Stories and Live Stories page, and a gallery of all Discover channels appeared on the next page over. Now, small Discover and Live tiles shared the very top spot, followed by friends’ new stories, followed by a much larger section of Live Stories tiles, followed by friends’ old stories (ones that had been posted within the past twenty-four hours but that a user had already viewed). Swiping right, one could see large rectangular panes showing both Discover and Live Stories content where the Discover gallery used to be.

  Discover and Live were converging into a broader content section. Live was simply better content, as it took advantage of Snapchat’s unique value proposition of having a camera in over a hundred million people’s hands, and it was far more popular with users than Discover. Discover looked like lists and goofy articles had been taken from the web and slapped into Snapchat. Live looked like nothing else on the internet. And Snapchat worked hard to keep it that way, exerting more editorial control over the stories and convincing celebrities to use the social media app all their cool young fans were using.

  Snapchat’s coverage of the Rio Summer Olympics in August 2016 featured exclusive footage from partner NBC mixed with on-the-ground photo and video snaps from fans and athletes themselves. NBC decided to air the games on a tape delay, and aggressively pursued other social networks to take down footage from the games that fans or media outlets posted, making Snapchat one of the best ways to follow the Olympics. Live Stories from Rio ranged from event-specific footage of a swimming race to crowd reactions to a compilation of US swimmer Ryan Lochte in his room in the Olympic village goofily trying out Snapchat lenses to make his face look different.

  Snapchat’s Live Story for the Opening Ceremony started with a video from NBC of President Barack Obama and First Lady Michelle Obama wishing the US athletes luck. Then viewers saw golfer Rickie Fowler walking through the Olympic village. Team USA basketball star Kyrie Irving filmed a selfie video of himself and teammate Kevin Durant. Tennis superstar Serena Williams posted four Snapchats from her point of view in the Olympic Village and hanging out with basketball star Carmelo Anthony. Snapchat mixed in footage of the Olympic torch traveling through Brazil with flashbacks of the 2008 and 2012 opening ceremonies. Athletes from a wide range of countries posted to the story, from the Italian water polo team to the Nigerian basketball team. Brazilian model Gisele Bündchen blew the camera a kiss and thanked them for making a Snapchat geofilter just for her.

  Around fifty million people, one-third of Snapchat’s daily active users, watched at least one of the Olympics Live Stories. Snapchat partnered with seven broadcasters, including NBC in the United States and the BBC in the UK, to show footage. NBC gave BuzzFeed staffers full editorial control over its daily Rio Olympics story, which ranged in content from highlights and recaps to BuzzFeedy stories like “Can You Guess the Sport by the Athlete’s Butt?” NBCUniversal invested $200 million in BuzzFeed in 2015, which probably helped the two companies work together; the stories were NBC branded, with no BuzzFeed logos.

  Advertisers don’t think about Live and Discover very differently, as they just look to align their advertising with the right audience. Live offers advertisers more opportunities to plan ahead, as Snapchat sends advertisers a calendar of Live Stories months in advance. Planned stories range from sports games to music festivals to holidays to “Study Abroad” to spotlights on cities from Reykjavik, Iceland, to Lagos, Nigeria. Most are focused on one geographic location (a stadium, city, etc.) while others, like “College Graduation” and “Prom,” are not.

  Increasingly, Snapchat is going directly to the source for content it wants on Live Stories. People, a Discover partner, pitched a Live Story collaboration for the Oscars, but Snapchat simply worked with the Academy and event organizers to produce their own Live Story. In 2016, Snapchat struck a deal with the NFL to create Live Stories for each of the 256 regular-season games, every playoff game, the Super Bowl, and other league events like the NFL Draft. In 2015, the NFL and Snapchat collaborated on fifty-eight Live Stories covering games and the draft; seventy million people worldwide tuned in to watch.

  Twenty-one million people tuned in to watch the Video Music Awards on a Snapchat Live Story in 2016. These people—up from twelve million who watched the same Live Story for the 2015 show—watched 30.5 million total video views. On linear television, only 6.5 million people watched the VMAs, down 34 percent from 2015, despite the awards show being broadcast on eleven networks (MTV, MTV2, MTV Classic, VH1, Comedy Central, Spike, TV Land, BET, CMT, Centric, and Logo). Live shows like the VMAs and Oscars and sports are cable’s last big appeal, and thus huge for Snapchat. If you want to watch this content but not badly enough to pay for cable or watch at a bar, Snapchat’s Live Stories are good enough. Snapchat isn’t just becoming a replacement for Facebook—it’s becoming a replacement for TV.

  NBCUniversal signed a multiyear deal with Snapchat in August 2016 to create new content for Discover. NBC won’t simply be repurposing TV content, like it does on Facebook and YouTube, but will be shooting content specifically for Snapchat’s vertical video format. First up, The Voice came to Snapchat, with users submitting performances an
d celebrity coaches like Miley Cyrus and Blake Shelton judging them, all via Snapchat. NBC will also showcase comedic talent from Saturday Night Live and The Tonight Show Starring Jimmy Fallon to create short series on Snapchat. Snapchat spoke with content creators about making original shows for Snapchat like Peter Hamby’s Good Luck America.

  As it made room for new shows, Snapchat continued to cut what wasn’t working. The company killed off its local stories, the city stories in New York and Los Angeles that let anyone in the city contribute to a daily story that only those in the city could watch. Local just wasn’t as popular as the larger, event-based Live Stories—although college Campus Stories were still very popular and were not cut. Fifteen curators worked on Local Stories. Nick Bell called them all into a security room at Snapchat, which typically would have been filled by the company’s security guards. Bell abruptly told the group that this would be their last day at Snapchat as the company shuttered Local Stories.

  What was once envisioned as a daily digital magazine had blossomed into much more. But the growth and success have not come from the Discover publishers, leaving them in a strange purgatory. Like the rest of Snapchat, Discover has been fertile ground for experimentation. Snapchat hasn’t been shy about redesigning Discover or moving on from underperforming publishers. If users continue gravitating toward stories focused around specific events and topics rather than the publisher-branded digital magazines, Snapchat will invest more in Stories and less in Discover. It’s possible they may even kill Discover outright at some point.

  On the other hand, does Snapchat really want to build a new-age Conde Nast or Hearst publishing within its walls? Live Stories is already an enormous undertaking; users sent in over eight hundred hours of video to the Coachella Live Story, which content analysts had to sift through to pull out the very best to go on the story. In the future, machine learning and image-recognition software can help with this load, but Evan will likely still want to rely on human editors at least to some extent. Rather than producing all of this content itself, Snapchat may partner with publishers around specific stories, like it has for the Rio Olympics, rather than giving publishers free reign to post publisher-branded stories every day. Publishers could still share revenue with Snapchat and have their branding somewhere on the Live Stories they produce.