Snapchat said its users are viewing as many as 4 billion videos a day, a count that is equal to numbers reported by rival Facebook.
The Venice social media app’s video engagement has doubled from the 2 billion views it had in May. Most of its views come from Live Stories, a curated stream of pictures and videos published periodically by Snapchat.
The Live Stories feature has become an important revenue stream for Snapchat, which sells 10-second advertisement inserts against its content. The company is reportedly estimating it will generate $50 million advertising revenue this year, climbing to $200 million next year.
It has also been spending a rapid pace, and the growth in video viewership may account for some of that. Documents leaked last month showed Snapchat spent nearly $130 million between in the first 11 months of last year. The largest portion of spending, $47 million, was on “product.”
Company representatives did not return calls seeking comment.
Though delivering video has become cheaper in recent years as third-party providers like Amazon Web Services and content distribution networks like Santa Monica’s EdgeCast have grown, it still is a significant portion of any app developer’s budget, said Eden Chen, founder of app and Web development company Fishermen Labs of El Segundo.
“It is extremely expensive to store large amounts of information, and video is the largest form of information out there,” he said. “I’m sure streaming 4 billion videos is not very easy in terms of the amount of server costs they are experiencing.”
With revenue starting to trickle out of its advertising units, Snapchat has been covering its costs with cash from investors. The company had $321 million in cash on hand as of last November, enough at its then-burn rate to sustain the company for at least two years. It has since raised close to $1 billion from investors, according to website Crunchbase.
Technology reporter Garrett Reim can be reached at [email protected]. Follow him on Twitter @garrettreim for the latest in L.A. tech news.
