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Snapchat could compete with TV networks rather than Facebook in creating original content

Snapchat owner Snap Inc could soon take a slice of the video advertising pie by taking on TV networks with original content, according to new research.

"Snapchat could see financial success not by necessarily gaining share from Facebook or Instagram but rather by carving out a space for itself as a mobile-first, youth-focused digital video network," says Brandon Verblow, an associate forecast analyst at Forrester and author of the research company's latest social media advertising forecast.

Verblow suggests that Snapchat could compete with the likes of Viacom's networks such as VH1, Nickelodeon and Comedy Central, which generated $4.8 billion in ad revenue last year, says Forrester's report.

Snapchat and Facebook logos pictured on smartphones
NurPhoto | Getty Images
Snapchat and Facebook logos pictured on smartphones

While some of Facebook's young audience is tiring of advertising on the platform, Snapchat users seem to have a higher tolerance. More than a quarter (26 percent) of US Facebook users aged 12 to 17 think it has too many ads, versus 11 percent for Snapchat, according to Forrester's online research which surveyed more than 3,000 young consumers in the U.S.

Still, Facebook grew the most of all the social platforms in 2016, with 75 percent of global social ad dollars spent on it, and it is likely to start making serious money from video advertising. "While Facebook video runs the gamut from user-generated animated GIFs to slickly-produced news videos from CNN, we expect that ad spending will be skewed toward the latter TV-style videos," Verblow states. Forrester expects that commercials within TV networks' content will provide most of the video ad growth.

Earlier this month, Facebook launched Watch, to help users discover videos outside their news feed more easily, and in July announced higher than expected Q2 earnings driven by sales of mobile video ads. Its revenue for the quarter was $9.32 billion, versus an expected $9.2 billion.

Snapchat meanwhile launched daily news service "Stay Tuned" with NBC in July, with revenue split between the two. Snap did not immediately respond when contacted by CNBC.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.

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