Snapchat+ tops 25M subscribers, driving company’s direct revenue ARR to $1B

Snap hits a billion dollar run rate

Snap’s direct revenue business reached a $1 billion annualized revenue run rate this week. The company announced the milestone on Wednesday, attributing the growth to the rapid expansion of its Snapchat+ subscription service. This figure represents the current revenue pace projected over a 12-month period.

The service now has more than 25 million paying subscribers. Snap launched the subscription tier in 2022 as a way to diversify its income beyond digital advertising. It has since become one of the fastest-growing consumer subscription products on the market.

The company confirmed that subscriber numbers have grown every quarter since the program began. What started as a small experimental offering for power users has transformed into a primary pillar of Snap’s financial strategy. It turns out people will actually pay for social media if you give them the right stickers and badges.

New tiers target power users

Snap is moving beyond its original single-tier model to capture more revenue from its most active users. The company recently introduced multiple paid levels that offer varying degrees of access to augmented reality and experimental tools. These tiers allow the company to extract more value from users who want more than just basic cosmetic changes.

The current subscription lineup includes several distinct price points and feature sets:

• Snapchat+ Standard: Costs $3.99 per month and provides early access to new features and exclusive app icons.
• Lens+: Costs $8.99 per month and includes exclusive AR Lenses and advanced creative tools.
• Snapchat Platinum: Costs $15.99 per month and offers an ad-free experience along with massive cloud storage.
• Memories Storage: Costs $1.99 per month as a standalone add-on for users who exceed the new free limits.

The Platinum tier represents Snap’s most aggressive attempt to move into the high-end subscription market. By pricing it at nearly $16, Snap is positioning itself alongside premium streaming services like Netflix or Disney+. The company is betting that its core demographic is willing to pay a premium to remove advertisements from their personal feeds.

Memories storage is no longer free

Snap recently changed how it handles long-term data storage for its users. In September, the company announced it would cap the amount of free storage available for the Memories feature. This move forced long-time users to either delete their saved photos and videos or pay for a monthly subscription.

Free users now face strict limitations on how many "Snaps" they can save to the cloud. To keep their archives intact, users must upgrade to a paid plan. Snap is using these storage caps as a primary lever to convert free users into recurring revenue sources.

The storage allocations differ significantly between the paid tiers. Standard Snapchat+ subscribers receive 250GB of cloud storage for their Memories. Those who pay for the Platinum tier receive 5TB of storage, which is enough to hold years of high-resolution video content. Snap is essentially becoming a cloud storage provider disguised as a camera company.

Creators get their own paywalls

Snap is expanding its direct revenue model to include individual content creators. The company launched an alpha test for creator subscriptions this week with a select group of influencers in the United States. This move allows creators to charge their followers a monthly fee for exclusive access.

The initial test group includes high-profile creators such as Jeremiah Brown, Harry Jowsey, and Skai Jackson. These individuals can set their own monthly prices for their subscription offerings. This mimics the business models of platforms like Patreon or OnlyFans, but keeps the transaction within the Snapchat ecosystem.

Subscribing to a creator unlocks a specific set of perks designed to increase engagement. Fans who pay will see subscriber-only content and get priority replies to their messages on public Stories. The subscription also removes ads from that specific creator’s public content, providing a cleaner viewing experience for superfans.

Meta prepares a subscription response

Snap’s success with paid tiers has caught the attention of its largest competitors. Meta is currently testing its own set of subscription features for Instagram, Facebook, and WhatsApp. For years, the social media industry relied almost exclusively on targeted advertising, but Snap’s $1 billion milestone proves that users are willing to pay for status and utility.

The shift toward subscriptions comes as the digital advertising market faces increased volatility. Changes to mobile tracking and privacy regulations have made it harder for companies to monetize users through traditional ads. Snap’s 25 million subscribers provide a predictable monthly income that does not depend on advertiser sentiment.

Snap plans to continue expanding its direct revenue business through 2025. The company stated it will focus on community-driven features and deeper customization options for its paying members. If you want to keep your digital memories or talk to your favorite influencer, you should probably get your credit card ready.