Time Warner, Snap ink $100M deal for shows and ads: report

Media & Advertising FOXBusiness

Time Warner (TWX) and Snapchat parent company Snap (SNAP) have reportedly signed a wide-ranging deal to create up to 10 original shows a year for the social-media platform.

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The two-year, $100 million agreement, reported by Dow Jones on Monday, allows Snap to work with Turner cable channels and the Warner Bros. studio for new three to five-minute shows, including scripted drama and comedy, that will run on Snap. A path would also be provided for HBO to develop shows for the app.

Under the deal, Snap will reportedly keep 50% of revenue from the shows with media partners taking the other half.

Investors have, in recent weeks, ditched their positions in the social platform that bills itself as a camera company. Last week, Snap shares tumbled to their initial public offering price of $17 after figures showed Snapchat downloads have deteriorated as rival Instagram – owned by Facebook (FB) – have risen as it rolls out copycat features to better compete against Snapchat. 

The reported deal with Time Warner helped send the company’s shares more than 1.3% higher on Monday, reaching $17.85 as investors see potential growth opportunities amid a new advertising strategy after the company disappointed investors last month when it reported a first-ever drop in revenues—which rely almost exclusively on ads.

In an interview with Dow Jones, Snap’s chief strategist, Imran Khan said the deal represents a big opportunity for the company since many young people – a highly sought after demographic for advertisers – turn to the app for the latest news and entertainment rather than traditional forms of media.

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Gary Ginsberg, Time Warner’s executive VP of corporate marketing and communications, meanwhile, said in an interview his company sees the effort driving viewership to TV, film content, and emerging direct-to-consumer services. 

Time Warner shares rose 0.64% to $99.83 following the report.

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