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Snapchat Tries Another Way to Make Money: More In-App Purchases

Snapchat is selling lenses now, too.

Snapchat is trying to figure out how to turn its 100 million-plus daily users into daily contributors to its bottom line, and it’s throwing all kinds of ideas at the wall to see what sticks.

On Friday it started testing another: A “lens store” where users can pay 99 cents to transform their selfies by adding special effects or costumes to the image. The company has offered free lenses for a few months, and even tested its first sponsored lens last month with Fox Studios to promote the new “Peanuts” movie. But some of the original, popular lenses — like the one that allows users to “puke” rainbows — disappeared over time to make room for new designs. Well, now Snapchat is bringing them back for a small fee.

The store isn’t so much a destination within the app as it is a prompt to purchase a lens that’s no longer available for free. It’s the second type of in-app purchase the company has rolled out since September. You can also buy “replays” within the app, which allows you to rewatch a snap that you’ve already seen.

On the surface, in-app purchases seem like a small revenue driver compared to Snapchat’s more mature ad products, which can generate well over half a million dollars for just 24 hours in some cases. But the idea of charging 99 cents for anything within the app just shows how important revenue is for Snapchat — and how it’s still trying to figure out which revenue drivers may actually work. The store helps set a precedent for other in-app purchases down the road, too, which the company has hinted at in the past.

Snapchat is still working to live up to a $16 billion valuation, after all, and it didn’t get a glowing endorsement this week from investor Fidelity, which downgraded the value of the company stock it holds by 25 percent. Selfies can’t hurt.


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