Snap Inc. SNAP is partnering with Comcast-owned NBCUniversal to launch a studio that will produce scripted shows for the company's video and messaging application, Snapchat. The terms of the deal were undisclosed.
Reportedly, the Santa Monica-based yet-to-be-named studio will be jointly owned by both the companies, with each having an equal share. Lauren Anderson, who previously served as Senior VP of current programming at NBC Entertainment, has been appointed as the chief content officer for the joint venture.
The company's first scripted show will be created by partners and brothers Mark and Jay Duplass through their production agency Donut Studios and is expected to be released next year. Per Variety , the brothers already have a lot of ideas for both scripted as well as unscripted shows, which they plan to showcase for 8 to 10 minutes per episode.
Anderson was quoted saying, "By combining the best-in-class creative expertise of NBCUniversal with the broad digital reach of Snapchat, we have the unique ability to take mobile programming to the next level, creating compelling shows for both viewers and advertisers."
We believe this initiative of the company to woo audience and advertisers to its platform will help the share rebound. Notably, its shares have lost 34.3% of their value since its listing date of Mar 2, 2017 against 13% growth of its industry .
Increased Focus on Original Content
Snapchat has previously hosted other NBC-owned shows like Stay Tuned, The Voice andE! News' The Rundown. It is also worth mentioning that NBCUniversal had invested $500 million in Snap's initial public offering held in March this year.
Per Snap, within a month of its Julyrelease, Stay Tuned was able to draw "more than 29 million unique total viewers" to the platform. The company also added that over 40% of the viewers watched the show minimum thrice a week.
In August, the company announced its intention to create three to five-minute long original scripted content by the end of 2017. Snap's head of content, Nick Bell mentioned the company's mobile-first TV strategy to be an "interesting next venture".
Moreover, as reported by The Wall Street Journal, in the month of June, the parent company of Snapchat inked a $100 million content deal with media giant, Time Warner Inc.
Earlier, the company had also inked a deal with NBC Universal for 2018 Winter Olympics and brought on board The Walt Disney Company's ABC network, BBC and Vice Media.
Snap hopes to air up to three shows per day by the end of the year. We believe with binge viewing catching up fast, the company's focus to expand its original content portfolio will attract new subscribers and drive its top line.
However, the company faces stiff competition from established players like Netflix NFLX , Amazon AMZN Prime, Hulu and HBO. Tech giant Apple and the company's archrival Facebook FB are also gearing up to cash in on the high growth opportunity in the video streaming market.
Snap Inc. Price
Snap has a Zacks Rank #4 (Sell).
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