Snapchat's million-dollar idea

Can you build a better TikTok with a daily lottery?

Snapchat's million-dollar idea
Snapchat Spotlight (Snap)

Today, let’s talk about the deceptively bold way in which Snapchat has reimagined TikTok as part of its new feature, Spotlight. A new milestone on TikTok helps to explain the opportunity.


Over the weekend, TikTok saw its first creator reach 100 million followers. The creator is Charli D’Amelio, who hit that mark just 18 months after she created her account. That speaks to the broad appeal of her personality and her videos, which often feature popular dances of the moment. The mark also reflect the rapid growth of TikTok, whose short-form videos are rapidly taking over all social networks.

But in another way, D’amelio’s achievement wasn’t remarkable at all. In fact, in many ways it was textbook: a fast-growing new platform, a young and beautiful creator, and recommendation algorithms that drive more and more attention to the early winners over time. YouTube once had human editors choosing videos to go on its homepage; later, it added recommendation algorithms. Both contributed to the rise of early YouTube stars. Instagram often promoted new creators on its own Instagram account; later stars emerged through its recommendations-driven “explore” tab.

TikTok’s approach to promoting videos differs from its predecessors in notable ways. It opens to a feed of videos that have been chosen for you based on whatever the app has gleaned about you, whether you follow anyone or not. This following-optional model has meant that the app is as likely to make a star out of a dance or a snippet of audio as it is to make one out of a human being.

That’s a primary reason why TikTok now feels like a vital engine of culture in a way that other social networks don’t. Instagram mostly knows how to promote influencers; TikTok, on the other hand, spreads dances, sounds, and jokes.

All of this has had a democratizing effect on the kinds of videos that go viral. The app’s For You feed is one of the most delightfully unpredictable spaces in social networks — even as it learns your preferences, TikTok still manages to surface truly strange and compelling new things.

Yet despite those differences, TikTok’s influencer economy looks much like any other platform’s. A handful of creators attract many millions of followers; those creators get sponsorship deals; and thus the rewards to individual users follow a rich-get-richer distribution. Even TikTok’s plan to pay US creators $1 billion over the next three years seems designed more to retain top creators than it is to build new ones.


What Snap is asking with Spotlight, the company’s own take on short-form video, is whether you can build an engine for culture that benefits many thousands of people, rather than hundreds. The company’s idea is to replace public follower counts, likes, and comments with something that more closely resembles a lottery — and at least through the end of this year, the company will pay out $1 million a day.

Here’s Sarah Frier explaining Spotlight in Bloomberg:

To earn the money, video submitters to Spotlight don’t have to have large followers — or even have public profiles. Instead, an algorithm will determine what to show Snapchat users based on how often others view the post. If others view the same video repeatedly, for instance, that’s a signal it’s catching on and will spur the algorithm to distribute it more widely. […]

It’s unclear whether the random chance for a big payout will pull users’ great ideas away from TikTok and Instagram, but Snap provides a unique option: a video’s maker can choose to be private, offering a break from influencer culture. Snap has previously benefited by betting on a product that lowers pressure for users.

For TikTok to succeed over the long term, it has to retain D’Amelio and its other top creators even as their success continuously brings them new opportunities. (Facebook is already coming for them.) For Snap to succeed, it only has to regularly convince average people to play the lottery in between messaging their friends. This bears close watching. Messaging is the stickiest user behavior that exists, and people really, really like lotteries.

Snapchat has a lot of potential entrants in its daily talent show: 249 million daily users, the majority of which likely live in the countries in which Spotlight will initially be available: the United States, Canada, Australia, New Zealand, the United Kingdom, Ireland, Norway, Sweden, Denmark, Germany, and France.

The app’s popular map feature has already shown that Snapchat’s community will contribute public posts to the network. Now, with Spotlight, they’ll have an ongoing —if fuzzy, and possibly only theoretical — financial incentive to do so. (Of course, as Ryan Broderick points out, they’ll also forego any direct connection with their fans, and remain forever subject to the whims of Snap’s algorithms and human reviewers.)

Notably, Snap is placing its incentives at the level of the content, rather than the creator. While some Spotlight posts bear the creator’s name, many really are anonymous — allowing people to profit from their posts without having to develop (and eventually become boxed in by) Snapchat-specific personas.

That’s not to say Snapchat couldn’t develop an influencer ecosystem that closely resembles its peers. In fact, the company keeps taking steps in that direction — earlier this month, for example, Snapchat began allowing its creators to publicly display their follower counts. Creators with large followings would seem to have an initial advantage in the daily lottery; it remains to be seen how many average citizens will win big.

I hope that many do. The real opportunity for Snap here isn’t that it incubates the next Charli D’Amelio in Spotlight — it’s that thousands of creators make real money on the platform, either once or a large handful of times, and we never learn their names at all. That would be something truly new in social networks — intermittent financial rewards just for using the platform as intended. And it would create a popular destination for Snapchat to show ads, too.

Is it possible that daily rewards paid directly to creators could create a healthier network than our current marketplaces for attention? I don’t know — and when I chatted with folks at Snap last week, they admitted to not knowing themselves. But they very much felt that something like this was worth a shot, and so do I.

The Ratio

Today in news that could affect public perception of the big tech companies.

⬆️ Trending up: Facebook, YouTube, and Twitter will collaborate to fight misinformation about the COVID-19 vaccines when they begin to arrive. They’ll work with fact-checkers, researchers, and governments to provide high-quality information when the time comes. (BBC)

⬇️ Trending down: Amazon has made extensive use of Pinkerton detectives to spy on warehouse workers and monitor labor unions, environmental activists, and other social movements, according to a new investigation. Among other techniques, the company closely monitors activists’ social media posts. (Lauren Kaori Gurley / Vice)

⬇️ Trending down: Lobbyists for Apple are reportedly attempting to weaken a bill that would punish US companies for using forced labor from China’s predominantly Muslim region of Xinjiang. It’s unclear which provisions Apple wants to see changed; the bill is meant to protect China’s Uighur minority. (Reed Albergotti / Washington Post)

⬇️ Trending down: Airbnb’s first-ever “chief trust officer” quit six months into the job over concerns that the company was sharing too much data with the Chinese government. Sean Joyce, a former deputy director of the FBI, came to believe that Airbnb was too cooperative with China’s authoritarian regime. (Dustin Volz and Kirsten Grind / Wall Street Journal)


A German law meant to crack down on online hate speech has been copied by authoritarian regimes in Venezuela, Russia, and elsewhere. Predictably, they’re using the law to quash dissent. Jacob Mchangama and Joelle Fiss had this important report earlier this month in Foreign Policy:

The Network Enforcement Act has woven itself into the landscape of internet governance at a time when many states worldwide are pushing for increasing regulation to fight online threats, both real and imagined. The critics of the law who warned that the act might legitimize a model of online censorship that can readily be adapted to serve the ends of authoritarian states have been proved right. Our new research shows that in less than two years the law has essentially been copy-pasted by governments around the world—most of which do not match Germany’s commitment to democracy, the rule of law, and human rights.

Since the adoption of the new German law, at least 13 countries—in addition to the European Commission—have adopted or proposed models of intermediary liability broadly similar to the act’s matrix. According to Freedom House’s 2019 assessment of freedom on the internet, four of those countries are ranked as being “not free” (Venezuela, Vietnam, Russia and Belarus, Honduras is not surveyed but is ranked as “not free” on press freedom), five are ranked “partly free” (Kenya, India, Singapore, Malaysia, and the Philippines), and only three are ranked “free” (France, the United Kingdom, and Australia). 

Vietnam is threatening to ban Facebook for its decision not to remove more posts critical of the government. After the company agreed to remove some posts, the Vietnamese government told the company to go even further — or else. (James Pearson / Reuters)

The Solomon Islands may ban Facebook after citizens used the network to criticize the government for failing to spend funds marked for economic recovery in the wake of the pandemic. Another domino in the splinternet appears poised to fall. (Evan Wasuka / Australian Broadcasting Corporation)

Expanded Facebook content restrictions in Myanmar seem to have helped reduce the spread of misinformation and hate speech ahead of the country’s November 8 elections. It’s the first time the company created country-specific community standards — and hopefully not the last time. (Peter Guest / Rest of World)

President Trump’s refusal to concede the election may be making Joe Biden’s campaign more vulnerable to cyber attacks. There’s a lot resting on the security of Biden’s Google workspace. (Andrew Restuccia and Dustin Volz / Wall Street Journal)

Apple, Amazon, and Microsoft are among the companies asking a judge to prevent Google’s in-house lawyers from reviewing documents they shared with the government in its antitrust suit against Google. So the market isn’t competitive but the but the documents are — got it. (David McLaughlin / Bloomberg)

Twitter confirmed that it will hand the keys to the @POTUS account over to Joe Biden on January 20. Past then, any coup-related tweets will need to be tweeted from Donald Trump’s personal account. (Sarah Emerson / OneZero)

Facebook will transition its own POTUS account keys to Biden as well. (Reuters)


Are Facebook ads reaching their saturation point? “Facebook has increased the number of ads served on its platforms by a quarterly average of nearly 30% year on year since the third quarter of 2015,” writes Laura Forman in the Wall Street Journal. Interestingly, though, prices have been declining — thanks to competition in the marketplace:

Initially, much of the pricing decline came from a mix shift toward Stories, where ads are fleeting, and geographies Facebook said monetize at lower rates. But lately competition from social media peers appears to have become more formidable. Third-quarter sales from Snap Inc.’s Snapchat and Pinterest grew 52% and 58%, respectively, versus last year, for example. Facebook’s sales grew less than 22% over the same period, albeit off a much larger base.

Snap acquired Voisey, an app for laying your own vocals over music tracks. It sounds ideally suited to the new Spotlight feature. (Ingrid Lunden / TechCrunch)

Microsoft now offers free all-day video calling through Teams, in a new bid to challenge Zoom. Up to 300 friends and family can join. (Tom Warren / The Verge)

Gab hired a former Facebook software engineer as its chief technology officer. Fosco Marotto said in a Gab post that he wanted to “must protect and defend free speech and build free speech software and services.” (Ben Makuch / Vice)

When the hotly anticipated game Cyberpunk 2077 arrives, it will come with a “streamer-friendly” mode that removes copyrighted music tracks from play. The move comes as Twitch streamers are being slammed by DMCA takedown requests. (Ashley King / Digital Music News)

More startups are seeking to capitalize on the pandemic by creating “virtual headquarters” software to make remote work less painful. Branch, Gather, and the more events-focused Hopin attempt to recreate real-world interactions with varying degrees of success. (Natasha Mascarenhas / TechCrunch)

An overview of augmented reality technology as new Apple phones with LIDAR sensors enable new uses. Among other things, the technology promises to make life easier for people who are blind or partially sighted. (Scott Stein / CNET)

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