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Joseph Melles had been working at Wendy’s for a few months when he began to post videos to Snapchat’s Spotlight feature in hopes of landing some of the $1 million per day prize money the company was offering for videos that went on the app.
Melles started posting videos in March, and Snap, the company that makes Snapchat, sent him a message in April offering him thousands of dollars after one of his videos racked up 300,000 views in 24 hours. Melles got a $19,600 payment from Snap for the video, and he quit his Wendy’s job a few days later.
“I was just in shock,” said Melles, 18 of Colorado.
Snapchat set the bar last year when it announced it would pay out Spotlight creators from a pot of $1 million per day that the company promised it would continue to pay at least through 2020.
The social media giant minted a new class of millionaires, changing hundreds of lives. But that all began to change when the company announced on May 20 that it would no longer pay $1 million per day. Instead, Snap would pay “millions” per month starting June 1. A Snap spokeswoman told CNBC the new payout amount is in the “double-digit” millions each month, but declined to give a specific figure.
Now, complaining that payments are dwindling ever since that change, these creators are in search of other short-form video platforms where they can find similar hefty payments they had once gotten from Snap.
Despite making a living off Snap for the better part of this year, Melles said he hasn’t posted a video to Spotlight since June. Although he was once posting as many as 100 videos per day, Melles said Snap’s erratic payments since June 1 have demotivated him from creating more content for Spotlight.
“It’s sad because I worked really hard every day putting the hours in, but they haven’t paid me,” he said.
Melles is among a migration of social media users who are taking their content-creating talents from Snapchat’s Spotlight feature and heading to other paying services. Social media companies are in a fierce battle over getting creators to prioritize individual apps. Companies like Snap, Facebook, Google, TikTok and Twitter are courting creators to try and get them to spend more time on each individual platform, so they can fill the app’s content feeds to draw more advertising revenue.
“If they keep on skipping people like this, I feel like a lot of people will leave,” said Melles, who now spends his time creating YouTube videos.
Despite these complaints, Snap’s spokespeople told CNBC that the company remains heavily invested in paying creators and is now reaching all-time highs for creators who submit content to Spotlight on a daily basis. The company, however, did not specify an exact figure for this all-time high.
“We have seen incredible creativity and growth on Spotlight this year, including a tripling of daily submissions quarter-over-quarter and all-time highs in the daily number of creators posting to Spotlight since June 1,” a Snap spokesperson said in a statement. “While this growth has made our incentive program more competitive, more creators are receiving Spotlight payouts than ever before, and we have recently rolled out a wide variety of new programs and tools to help creators continue to grow and monetize with Snapchat.”
Snap also noted that restructuring its payout program allowed the company the flexibility to support creators who cater to niche communities as opposed to determining pay outs based solely on the absolute engagement that a single video gets.
‘Going H.A.M.’ for $1 million a day
Snap launched Spotlight in November 2020 as its answer to TikTok and Facebook’s Instagram Reels. The company rolled out Spotlight along with a daily pool of more than $1 million as an incentive to motivate users to submit content to the new feature.
That pile of cash drew in numerous teens and young adults with a surplus of free time during their virtual school and work days throughout the pandemic. These creators would upload numerous videos a day in hopes that one or two might go viral and warrant payment.
Neda Anvar, 23 of California, was among them. She began making Spotlight videos in February after hearing from some friends that there was money to be made. The first time Anvar got paid, she received a modest $3,000 for one of her videos. But not long after, one of her friends was paid $100,000 by Snap for two of his videos that went viral.
“After we got those initial first payments around February, then we started going H.A.M.,” Anvar said. (H.A.M. is a crude acronym popularized by Kanye West and Jay-Z, which roughly means to do something excessively.) “I work from home, so I kind of made it my second full-time job when I had little breaks in between my job.”
Anvar focused her content on just making short, catchy videos designed to grab audiences’ attention and lead them to watch multiple times, wracking up her videos’ view counts. The goal was for her videos to get at least 100,000 views in a 24-hour period. Prior to June 1, that was the rough threshold for knowing a video would get paid, she said. The method was to post multiple videos per day.
“It was all about consistency and probability. One of them was bound to go viral on Spotlight,” said Anvar, whose system worked. By her count, Anvar has earned approximately $130,000 from Snap in 2021.
For many of these creators, the money was life changing.
Jhordyn Gaddy, 25 of Missouri, was “a completely broke kid” before he started posting Spotlight videos in November. Gaddy’s cellphone service had been turned off and his car was about to be repossessed, but after he read on Twitter about Snap’s $1 million per day Spotlight program, he posted 10 videos. One of those went viral, and Snap notified Gaddy he’d receive a payment for nearly $19,000.
“When they actually sent the money, my jaw hit the floor,” Gaddy said.
Not long after, Gaddy took his Snap Spectacles, Snap’s computerized glasses with cameras designed for making Snapchat videos, and used them to record the view from the top of Pikes Peak in Missouri. He uploaded the video, and it racked up views over two days. Snap paid him twice for the video for a total of $93,000.
“This completely changed my life from where I was to where I am now,” said Gaddy, who used some of the money to turn his phone back on, pay off his car, buy his mom a Louis Vuitton purse and buy his little sister a car.
“I made a few big purchases, but I still have a lot of money left,” Gaddy said.
For Snap, the million dollar a day program was money well spent. It was able to quickly grow time spent on Spotlight and became one of its most used features. Snap said that in its second quarter, investing in Spotlight contributed approximately $76 million to its cost of revenue.
Snap in April said Spotlight has reached 125 million monthly active users. In the company’s latest earnings call, Snap said Spotlight’s average daily content submissions more than tripled when compared to the prior quarter, it said. In the U.S. alone, daily time spent on Spotlight grew more than 60% since the first quarter, Snap added.
At the same time, the app grew to 293 million daily active users users overall this prior quarter.
‘No rhyme or reason’
Upset Snapchat creators can point to a date when they say things shifted with the company: June 1.
Snap announced earlier this year it would change its incentive structure. Instead of a daily offering, users could earn from a pool of millions of dollars per month. When announcing the change in May, Snap said more than 5,400 creators had collectively earned over $130 million.
The company was still offering what was presented as hefty incentives, so many creators believed they’d still earn enough to justify their content creation. What they did not expect was how random the payments would become, many creators who spoke with CNBC said.
Whereas before creators could reliably count on a payment if one of their videos went viral with more than hundreds of thousands of views within a day, now it is more of a raffle as to who gets paid. Several users chatting about their woes on the app Discord in a group called “Snapchat Spotlight” told CNBC they have had videos with millions of views in a 24-hour period since June 1 that did not receive any payment. Meanwhile, videos with fewer views might receive payments.
Spotlight creators say there was a method to how Snap paid them prior to June 1, but now, there seems to be no rhyme or reason as to who gets paid.
“I simply just want to know why I’m not getting paid for my videos,” said Caren Babaknia, who is one of the moderators of the Discord group. Babaknia, 24 of the state of Washington, said they have earned about $250,000 from Spotlight.
Many of the creators in the Discord server said they feel Snap should pay them for their videos that have gone viral since June 1. Others say they simply want better communication from Snap so they can better understand how the company is determining who gets paid. The creators say there is no way to communicate directly with the company. There is a support email they can reach out to, but whenever they do, all they receive is an automated response.
“Now it’s like ‘Oh I got 300,000 views. Maybe, if I’m really lucky, I’ll get paid,'” Anvar said. “Is it worth making content anymore because it seems like it’s a random raffle who gets paid and who doesn’t.”
Creators jump ship to Instagram, YouTube and TikTok
The decrease in payments, the erratic nature of who gets paid and the lack of communication from Snap is why many of the Spotlight creators who spoke with CNBC said they’re considering leaving the platform or have already taken their content elsewhere.
Melles’ YouTube account, for example, was recently monetized, which means he’ll soon be able to start earning money for the content he posts on YouTube’s video service. Anvar said she is planning to post videos to TikTok moving forward. TikTok doesn’t pay for content as much as Snap does, but there are brand deal opportunities to be had on that service, she said. Gaddy said he has pretty much stopped posting Spotlight videos and plans to instead post videos on YouTube and start a podcast where he talks about social media. And Babaknia said he is now also posting his content on TikTok and Instagram Reels.
“Once they stopped paying $1 million a day they stopped putting their care into it,” Babaknia said.
Some creators indicated they’re planning on heading to YouTube Shorts or Instagram Reels. That’s because both of the companies recently have ramped up their efforts to draw in creators, each offering their own creator funds.
Facebook CEO Mark Zuckerberg said last month the company would pay out $1 billion now through 2022 to users who create content for its Facebook and Instagram social networks. The company also introduced a Reels Summer Bonus that would pay U.S. users who create great Reels content for Instagram.
Google announced its YouTube Shorts Fund in May, which will pay out $100 million to creators over the course of 2021 to 2022.
The Snap spokesperson told CNBC that there are other opportunities for creators to generate revenue through Snapchat besides Spotlight submissions. These avenues include Syndicated Shows on Snapchat’s Discover feature, an upcoming Gifting program, a Creator Marketplace and commerce opportunities. Snap also added that more features and creator programs will be announced soon.
Fortunately for Snap, however, its Spotlight feature is already populated with content. When Spotlight first launched, Snap relied on the $1 million per day pool to stimulate the creation of content. That prize money served to create a flywheel effect where now Spotlight has a steady stream of content and may no longer need a monetary boost.
The creators who are leaving Spotlight say they’re grateful for the money they earned from Snap, but they think the company is making a mistake. Some of the creators said they’ve already noticed a decrease in the quality of the content found on Spotlight as a result of the drop in payments.
“From what I see on Spotlight, there’s no good content. Everything I see on Spotlight I could see on TikTok or Reels or YouTube Shorts. It’s pretty much all the same content now,” Gaddy said. “It used to be like actually looking at somebody’s Snapchat story. Spotlight used to be way more interesting.”