Snap (SNAP) will allow users to restore Snapchat streaks, a popular feature that records usage, for a price, the company announced in a blog post yesterday (March 1). It is also rolling out the option to freeze streaks for subscription users soon, it said in the statement.
The option will make it easier for users to “take a break” from the app when camping trips, exams or other life events arise, the company said. Users can access the restore feature for free once, and they can purchase additional restores in the app for 99 cents in the U.S.
Snapchat streaks—which track how many days two users consecutively send Snaps to each other—are one of the features that keeps users returning to the app. Snapchatters have reported the addictive nature of maintaining streaks, which can serve as proof of real-life friendship. And losing a streak can be anxiety inducing, some users said. The new feature could address some of this stress and make the experience of using the app more enjoyable, but the strategy also seems counterintuitive to the purpose of streaks.
Snap has never turned a yearly profit in its 12-year history, a trend which worsened last year after advertisers reduced their spending in anticipation of a recession. In 2022, Snap lost $1.4 billion, double its losses from the year prior. Charging users to restore streaks could be an additional source of revenue for the company, and the streak freezing option is an incentive to purchase the premium tier, Snapchat+, which costs $3.99 per month. But despite the new income streams, analysts don’t expect the company’s fortunes to turn in the next year.
“SNAP will likely lose ad budget share again in 2023,” analysts at Jeffries Group wrote in an equity research report published today (March 2). The company’s losses have been due to limited product innovation and high employee turnover, said the analysts, James Heaney and Brent Thill. Other platforms like Meta and Google have been able to retain users for longer on their sites and have a better return on investment for advertisers, they said.
Last year, the company initiated a restructuring plan that included layoffs and a new focus on Snapchat+, which launched in June. More than 2 million Snapchatters pay for the service, which gives them access to features like custom notification sounds. Snap’s stock is down 88 percent its 2021 high.
In the past, the company sometimes restored streaks for users if they submitted an appeal to the company.
