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What: Snapchat is changing it’ ad sales revenue model with media agencies.
Why it matters: Snapchat wants to pay content partners a flat license fee up front and keep the ad money for itself, instead of sharing ad revenue.

syfspld0_400x400The messaging app Snapchat, now known as Snap, is planning to make some adjustments to the way it works with media companies by changing its revenue model.

Since its launch in 2015,  publishers were able to sell ads in their own channels and then split revenues with the app.Whereas, Snapchat sold ads against the same content using its own sales team. Now, splits have varied depending on the deal and who sell the ads, Re-code has reported.

Snapchat wants to pay content partners a flat license fee up front and keep the ad money for itself, instead of sharing ad revenue. This resembles TV networks model to buy programming.

Snapchat Discover is only open to around 20 publishers, including BuzzFeed, Cosmopolitan, The Wall Street Journal, Food Network, and the NFL. Around 100 million of Snapchat users visit the Discover section every month, with the top-performing channels averaging view time of between 4 to 6 minutes.

Sources told Business Insider that those top-performing channels average around 10 million monthly users a month — far fewer than the amount of visitors they get to their sites — so an upfront payment may be seen as preferential to a risky advertising revenue share that requires time investment for their sales teams.

Media outlets have been selling “packages” to marketers that include Snapchat inventory, as well as ads on their other platforms like television or their websites, according to Business Insider. But now that terms have changed, it is uncertain whether media outlets would continue offering  such deals or adjust to Snapchat’s new sales model while they accept money from it.

The move of the company may seemed to be aimed at having full control over its ad inventory to be ready for a public offering that could value the firm at US$25 billion or more.

Other digital platforms like Facebook and Apple, have offered similar programs to publishers that provide them content.

 

 

What: New York Times Co. has released its Q3 profits beating analysts expectations with Net income  of US$9.42 million( 6 cents a share) comparing to a loss of US$12.5 million, or 8 cents, a year earlier.
Why it matters: Print ad revenue fell 1 %( better than the 12.8% decline in the second quarter). Interestingly digital advertising declined by 5%. However, the company expects digital ad sales to post a year-over-year increase again in the fourth quarter.

finals_400x400New York Times Co. third-quarter profits have beaten analysts’ expectations as the publisher had its biggest increase in digital subscribers in three years.

Key results:

  • Ad revenue fell 2.1% in the quarter, weakened by digital ad sales that dropped 5 %, a major shift from the 14% gain in the second quarter)
  • Print ad revenue fell 1 %( better than the 12.8% decline in the second quarter)
  • Circulation sales gained 1.1%, a bit higher than in the most recent quarter
    Earnings were 9 cents a share (comparing with the 6-cent average of estimates compiled by Bloomberg)
  • Revenue rose about 1% from the quarter a year earlier, to US$367.4 million(Analysts had projected US$364.7 million)
  • Operating expenses declined 7.6%, mostly because of savings on outside printing costs and distribution
  • Net income was of US$9.42 million, or 6 cents a share, compared with a loss of US$12.5 million, or 8 cents, a year earlier.

Digital boost

descargaIn addition, the company suggested digital ad sales will post a year-over-year increase again in the fourth quarter.

Lately, the company has been trying to appeal more digital subscribers and sell online-marketing messages.The newspaper is actually planning to double its digital revenue to US$800 million by 2020 by increasing the number of paid online readers and drawing more young and international subscribers.
Moreover, the company added 51,000 digital subscribers, its biggest quarterly addition since the fourth quarter of 2012. Online subscribers now total to 1 million.

The NYT is planning to double its digital revenue to US$800 million by 2020 by increasing the number of paid online readers and drawing more young and international subscribers.

The Times has also teamed up with Facebook, Google and Apple to upload stories more quickly and reach readers on smartphones.

“It was our best advertising quarter of the year, year-over-year, despite a decline in digital advertising revenue, with better performance in print. We remain bullish about our digital advertising business and expect it to return to growth in the fourth quarter,” said New York Times Co. President-CEO Mark Thompson in a statement.

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