Three million Snap users pay for AI-enhanced service

A new subscription service from Snap Inc. called Snap+, which costs $3.99 per month, has already gained over 3 million users in its first phase, which provides early access to Snapchat's new features, such as the chatbot powered by artificial intelligence.

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In a statement Wednesday at Snap's annual partner summit, held in its hometown of Santa Monica, California, Snap said the company had exceeded its expectations regarding growth, including the addition of about a million paying users in the past 11 weeks. It was launched last year, but the company recently added a chatbot powered by OpenAI’s GPT technology to the service, known as My AI. This chatbot has been in service since February.

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Announcing the addition of 'Mirror' to Snap's augmented reality tool for large-scale projects was also announced at Snap's event

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The Chief Executive Officer of Snap, Evan Spiegel, told me during an interview that he had never imagined his company would have 3 million subscribers. Whenever we release new features, that makes people more interested in signing up and trying Snapchat+, so that's something we see as well. We have seen a lot of momentum with My AI.” 

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Taking advantage of My AI will soon be available to everyone - not just subscribers - according to Snap, the company announced on Wednesday.

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As Spiegel said during the event, the goal for Snapchat+ is to achieve a ten-million-user milestone by the end of this year and the progress Snap has made so far suggests that Snap is making progress in an area that can be difficult for social media companies to achieve: getting users to pay for the service. 

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Meta Platforms, Inc., on the other hand, began testing a subscription bundle last month and has not yet disclosed how many paid users the service has attracted according to company officials. Elon Musk, meanwhile, has been struggling to attract subscribers to Twitter's Blue service.

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Aside from the AI features that Snapchat+ offers, users can also get the app through Verizon Communications Inc.'s +play platform, which lets users customize the app's appearance, feel, and features to meet their user's personal preferences.

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There has been no growth in Snap's ad revenue as of late, and this will likely contribute to the company's overall growth stalling at the beginning of the year, which will lead to a decline in revenue during the first half of 2023.

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In order to cope with the slump, Snap has cut jobs and cut activities that are no longer deemed important and refocused on activities that increase user numbers, revenue, and augmented reality, as well as to improve the customer experience. 

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Even with the massive growth of selfies, snap remains just a limited part of Snap's overall revenue - and its user base - despite its recent launch. In June, Snap released Snapchat+ in a handful of countries, including the United States, the United Kingdom, Germany and the United Arab Emirates. 

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With about 750 million active users, Snap generated $4.6 billion in revenue last year based on people having a relationship with the app. 3 million users would generate less than $150 million in revenue.

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Besides offering users the ability to earn money via Snapchat, the company is also considering ways for their users to earn money through the app. Snapchat's new story posting feature, which allows all users of the app to become creators and gain followers on the app, makes it easier for them to become creators. As a way of attracting those types of users, Snap said it would give select creators a cut of revenue when ads appear between their Stories posts.