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Snapchat shuts down lens store, will instead focus on brands

The company started selling sponsored lenses last year, and can reportedly make $750k in one day

Technology trends and news by Steven Loeb
January 6, 2016
Short URL: http://vator.tv/n/427e

Given how fast Snapchat has risen to become a part of the culture, it's hard to remember that this is still a young company and one that is still working out its revenue model, seeing what works and what doesn't.

One way it has decided to make money is by selling special features to its users, asking them to pony up a few extra bucks to get a little more out of the service. That includes paid replays, as well as lenses.

Now Snapchat is shutting down the lens store, according to a report out from the Verge. 

Lenses, first introduced in September, were ways for users to enhance their selfies before they posted them. That could either mean a fake mustache or, most famously, rainbow vomit. There would be seven available at any time, with a new one replacing one of the old ones every day.

Here's an example of what a picture enhanced with lenses might look like:

Charming, eh?

The company launched the lenses store in November, charging users 99 cents to permenently buy one of 30 available lenses. So if someone wanted to have access to the rainbow puke, for example, they could pay 99 cents for that lens and then keep it forever.

So why shutter the store now, only two months after launching it? That's not entirely clear, though the company says it is doing so to put more focus on advertising, specifically on sponsored lenses, which allow brands to create their own lenses that will then become available to users.

The first such lens debuts over Halloween, when Fox bought a lenses to promote The Peanuts Movie.

Even if 10,000 lenses were being bought by users every single day, the company would likely make much, much for from a sponsored lens instead, up to $750,000 according to the Financial Times. Even if every single Snapchat user bought two lenses in a day, it wouldn't make anywhere near that much. Perhaps the money Snapchat was making by selling lenses simply wasn't worth the effort.

Obviously lenses aren't going away; they will still be offered for free, and Snapchat is apparently even bumping the number available at any time to 10.

What this makes clear is that Snapchat has figured out where it's revenue is going to come from: brands, not users.

It's unknown how much revenue Snapchat is generating from advertising so far. There were some documents that leaked over the summer, showing the company making $3.1 million, but winding up with a net loss of $128 million.

The documents only covered the period January to the middle of November last year, a.k.a. the time right before Snapchat started advertising. It was also right Snapchat teamed with Square for the launch of a payments feature called Snapcash, allowing users to send each other money. 

Since then it has started running ads, and even launched sponsored Discover channels in October . Now, the company is currently on track to have generated $100 million in revenue last year, according to Business Insider

VatorNews has reached out to Snapchat for confirmation of the closure. We will update this story if we learn more. 

(Image source: pedestrian.tv)