Snapchat says it's done sharing with media companies.
The red-hot messaging app wants to make a major change in the way it works with companies who supply it with content for its "Discover" section.
Instead of sharing ad revenue that section produces, Snapchat wants to pay content partners a flat license fee up front and keep the ad money for itself. It's the same model that TV networks use when they buy programming.
That's a switch from the terms Snapchat has offered since it launched Discover in 2015. Up until now, it has let publishers sell ads against their own content, and Snapchat has also sold ads against the same content using its own sales team. Splits have varied depending on the deal, and who sold the ads.
Other big digital platforms, including Facebook and Apple, have offered similar programs to publishers who provide them content. Snapchat's new model works
The new terms, which Snapchat has started proposing over the last few weeks, means the company will have full control over its ad inventory -- as it gears up for a public offering.
And for publishers, it means they will have a guaranteed payday when they create custom content for the app, instead of just hoping to make money. But the new deal also limits the money publishers can make from their stuff.
Snapchat looks as if it will extend the new terms beyond its Discover program. It has told content companies in talks to create "Snapchat Shows" — a new format similar to "Good Luck America," the short-form video series Snapchat makes itself — that it wants to use the license model instead of a revenue share for those shows as well.
Industry sources say Snapchat reps have started informing publishers about the new terms over the last few weeks, and would like to have new deals set up in the next month.