Is Snap a snip?
| Date | 14 August 2017 |
| Published date | 14 August 2017 |
| Pages | 410-412 |
| DOI | https://doi.org/10.1108/DPRG-03-2017-0011 |
| Author | Peter Curwen |
| Subject Matter | Information & knowledge management,Information management & governance,Information policy |
Rearview
Is Snap a snip?
Peter Curwen
Peter Curwen is Professor at
Newcastle Business School,
Northumbria University, Newcastle
upon Tyne, UK.
By early 2017, the dearth of
technology company initial public
offers (IPOs) was becoming
something of a concern. And then,
Snapchat came along. Launched at
US$17 a share, just above the
pre-IPO range of US$14-US%16, the
share price surged by over 40
per cent during its first day of
trading and by over 10 per cent on
the second to end the week at
US$27.1, having hit an intra-day
high of US$28.8.
At that price, Snapchat was worth
US$34.7bn, even though it had
recorded a net loss of US$515m
in 2016 – up from US$373m in
2015 – on revenues of a mere
US$405m, and the issued shares
carried no voting rights which were
reserved by the founders. Not
surprisingly, some commentators
reacted with warnings to
prospective investors, noting that
Snapchat operated in a
competitive environment, that its
business model was unproven and
that shareholders would be diluted
if large volumes of free shares
were issued to employees.
So, what exactly was so exciting
about the product itself? In
essence, unlike other social media
platforms, Snapchat allowed the
user to send off a photograph
which would disappear from view
after 10 seconds, thereby
eliminating the possibility of
(potentially embarrassing) photos
being hacked and leaked – unless,
of course they had been
“grabbed” by a viewer while
visible, the so-called “screenshot”.
Inevitably, this basic service is
being extended – Snapchat
Discover is excellent for homing in
on un-newsworthy news – but,
unlike Facebook and Twitter,
Snapchat is not designed as a tool
to communicate with the wider
world of acquaintances –
misleadingly referred to as
“friends” – or complete strangers,
respectively. Snapchat is intended
for groups of real friends.
They do use the service provided.
Roughly 160 million people open
the app an average of 18 times a
day, with 60 per cent of them
sending a snap every day and 25
per cent creating collections of
photos called “stories”.
Unsurprisingly, most participants
are aged 18-24 years, and it is
claimed that it is precisely this
demographic that is trying to avoid
any apps such as Facebook that
are frequented by the “uncool” –
that is, anyone over 35 years.
In principle, the idea that so many
people are spending so much time
unproductively is rather worrying,
but the counter-claim is that they
are no longer watching much TV;
so, the net effect on leisure time is
not significant. But the
PAGE 410 DIGITAL POLICY, REGULATION AND GOVERNANCE VOL. 19 NO. 5, 2017, pp. 410-412, © Emerald Publishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-03-2017-0011
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