Last Word: Ben Thompson On Snapchat’s Brand Media Shift
Snapchat: With this model Snapchat will have complete control of monetization on its platform. The fact that the company, like Facebook, previously let 3rd parties effectively sell advertising in its app has always been a bit weird, and this move not only fixes that but also insulates Snapchat from publishers agitating for influence on the product’s design. For example, under the old model, when Snapchat pushed down Discovery content last month, the company had to be concerned that publishing partners would start investing less in Snapchat content; by divorcing publisher revenue from views Snapchat can focus completely on its own interests.
Content Providers: Content providers, meanwhile, get a predictable and consistent revenue stream that is directly aligned with their core competency: making content. As I noted above I already think many content providers would be better off dumping their definitionally inferior ad-selling efforts anyways; direct payment simply formalizes this shift and provides needed predictability. More on this point below.
Users: This is the real payoff: if content providers are simply paid for producing good content, not by ads, then the incentives that drive what is created are fundamentally different. There will be a much greater focus on quality and impact, not just clicks. After all, the question will be whether or not the content makes the overall experience better.
This last point is, I think/hope, a really big deal: under the old model publisher and platform incentives were often aligned, but not always, and when they didn’t it was almost always in a way that was bad for users (misleading headlines) and, arguably, society (peddling falsehoods, etc.). Now, by paying publishers for content, Snapchat is not just assuming full control of what users see but also accepting full responsibility, and given that Snapchat, like all aggregators, wins by providing a superior user experience, it is the users who will benefit.
See more of the issue here.