ValueTheMarkets.com News Commentary - Total worldwide internet users numbered 5 billion in April 2022, with Statista data showing 4.65 billion people use social media as numbers continue to rise. But with advertising spending knocked lower, how are social media businesses adapting? This article discusses the issue with reference to Twitter (NASDAQ: TWTR), Snap (NYSE: SNAP), Microsoft (NASDAQ: MSFT) and QYOU Media (TSX: QYOU) (OTCQB: QYOUF).
QYOU Media (TSX: QYOU) (OTCQB: QYOUF) operates as a media company, producing and distributing content created by social media influencers, artists and digital content creators on television networks, satellite television, over-the-top media and mobile platforms.
The company also manages influencer marketing campaigns for major film studios and key household brands.
QYOU Media’s most recent earnings, which covered the three-month period ended 31 March, showed that the company had grown revenue by an astronomical increase of 2,410% against the same period 12 months prior.
The business expects that, even with advertising headwinds, each of the rest of its quarterly updates across the year ahead will show record revenues. That expectation comes as the company’s Chtrbox subsidiary, which is one of India’s leading creator-powered companies connecting brands and social media influencers, has announced the launch of a new division.
The ChtrSocial division will focus on helping brands multiply their social audiences with modern creative methods, including micro-videos and personalized brand storytelling. QYOU Media says the operation will offer cost effective and scalable solutions to community building for brands, allowing brands to become digital creators themselves.
It sounds like an attractive offering in an environment where many advertisers are cutting back on advertising spend, while also focusing more on social media. With QYOU Media’s wealth of experience in influencer marketing on-hand, ChtrSocial could be an exciting project.
Twitter (NASDAQ: TWTR), which was cofounded by Jack Dorsey, provides online social networking and microblogging service, offering users the ability to follow other users' activity, read and post tweets. It might be one of the planet’s major players when it comes to social media, but the business has had a rocky ride over recent months.
The company’s second quarter earnings saw average monetizable daily active usage rise by 16.6% on the same period in 2021. Even so, revenue dropped from $1.19bn to $1.18bn amid advertising headwinds.
However, the company also blamed the drop on instability associated with Elon Musk’s $44bn takeover bid.
In fact, Twitter is now suing the enigmatic South African billionaire in an effort to force him to follow through on the accepted bid.
Legal wrangling could hurt the business further, but Twitter is unlikely to let the matter drop as Musk’s bid, which equated to $54.20 per share, represents a premium on the current share value.
These difficulties may have contributed to the decision to increase the Twitter Blue service’s monthly price, which is climbing from $2.99 to $4.99 for new subscribers.
However, subscription and other revenue decreased in the company’s most recent quarter, falling by 27% to $101m. This decline, coupled with the miniscule contribution from subscription revenue compared to ad revenue, calls into question the company’s capacity to deal with slowing ad revenues.
With advertising revenue likely to dip, other industry peers also seem to be on the lookout for new or enhanced revenue streams.
Snap (NYSE: SNAP) is one company trying out the subscription model for size. The business provides technology and social media services, developing mobile camera application products and services that allow users to send and receive photos, drawings, text and videos.
The company, which runs the Snapchat platform, has changed its executive team amid advertising troubles but is having some success with new monetization efforts. The business is offering users a ‘premium’ service in the form of Snapchat+, available for $3.99 a month.
It has seen some success, with Snap confirming that it had brought in more than 1 million subscribers less than six weeks after launch.
Even without the potentially major impact of this subscription service, Snap reported revenue growth of 13% in its most recent earnings update. In its current state, this contribution is minor compared to the company’s overall revenue of more than $1bn in its second quarter, but the company will be hoping it is the springboard to further growth.
CEO Evan Spiegel has hinted there could be further changes, stating the company is aiming to cultivate “new sources of revenue to help diversify our topline growth”.
But when it comes to social media subscriptions, there is one offering which leads the way.
Headed by Satya Nadella, Microsoft (NASDAQ: MSFT) offers applications, extra cloud storage, and advanced security solutions, serving customers worldwide. It might not be the first company you associate with social media, but the software giant’s business networking oriented social media offering, LinkedIn, looks to have been going from strength to strength.
Microsoft acquired LinkedIn for $26.2bn in 2016, with the aim to grow the site and integrate software such as Office 365. Since then, it has achieved significant growth and become something of a money spinner.
In the company’s most recent earnings, which covered the three-month period ended 30 June 2022, LinkedIn revenue jumped by 26% compared to the same period a year prior. This increase came even as Microsoft’s platform was impacted by a general downturn in advertising spend.
The company has long operated a premium subscription service for users, which allows them to access in-depth statistics about their profiles, better visibility in messaging and access to training courses.
Microsoft is also pushing ahead with integration of LinkedIn with its huge library of software applications, with one of the latest updates including integration with video chat software Teams.
The software giant will be hoping that its multiple revenue streams and powerful synergy with other applications will mean that LinkedIn can continue to rake in the revenue despite an advertising slowdown.
ValueTheMarkets.com News Commentary
IMPORTANT NOTICE AND DISCLAIMER
PAID ADVERTISEMENT
This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by QYou Media Inc. to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of one hundred and ninety thousand US Dollars to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.
CHANGES IN SHARE TRADING AND PRICE
Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.
NO OFFER TO SELL OR BUY SECURITIES
This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.
INFORMATION
Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy. Any statements made should not be taken as an endorsement of analyst views.
NO FINANCIAL ADVICE
The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.
FORWARD LOOKING STATEMENTS
This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.
INDEMNIFICATION/RELEASE OF LIABILITY
By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.
TERMS OF USE AND DISCLAIMER
By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here https://www.valuethemarkets.com/terms-conditions/ and acknowledge that you have reviewed the Disclaimer found here https://www.valuethemarkets.com/disclaimer/. If you do not agree to the Terms of Use, please contact valuethemarkets.com to discontinue receiving future communications.
INTELLECTUAL PROPERTY
All trademarks used in this communication are the property of their respective trademark holders. Other than valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than valuethemarkets.com.
AUTHORS: VALUETHEMARKETS
valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above. This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance. ValueTheMarkets do not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. ValueTheMarkets have been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of valuethemarkets.com, has been paid for the production of this piece by the company or companies mentioned above.
Contact Details
ValueTheMarkets
ValueTheMarkets
+44 141 530 4080
