Snap Stock: Video Thrilled the Internet Star

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Media giants are flocking to Snap, Inc. (NYSE: SNAP), hoping to reach the otherwise elusive audience of millennials that continue to flock to Snapchat. Time Warner's (NYSE: TWX) CNN became the latest news giant to launch a daily news show on the popular social hub, rolling out The Update at 6 p.m. on Monday. Time Warner's show will stream daily at that time, offering up at least five news stories featuring existing field footage as well as Snapchat-exclusive content. 

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Time Warner is no stranger to Snapchat. CNN is an original content partner for Discover, Snapchat's video platform that since early 2015 has given traditional media behemoths a way to publish existing short-form content on Snapchat. However, since Comcast's (NASDAQ: CMCSA) NBC News launched Stay Tuned earlier this summer -- amassing healthy viewership trends -- it's become a dinner bell for other content creators. The Update is Time Warner's first show made exclusively for Snapchat.

Teaching old media some new media tricks

Comcast has a hit with NBC News' Stay Tuned. In a story initially reported by Axios but later confirmed by Snap itself to Reuters, Stay Tuned attracted more than 29 million unique viewers in its first month on Snapchat. If Comcast can draw a crowd with a dedicated show, one can only imagine how well CNN will fare. 

There will naturally come a point when there are too many media moguls vying for the same audience. Snapchat has 173 million daily active users, and many of them checked out Stay Tuned. The audience will likely be divided as CNN's The Update and other news shows compete for viewers.  

The only clear winner at this point will be Snap. As more broadcasting behemoths flock to the platform, it will drive the same big-name advertisers that follow the media giants on traditional television. Everybody wants to reach millennials who are no longer accessible through conventional radio and television advertising. 

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There are naturally challenges at Snap, and that's why the stock is now trading below its March IPO price of $17. Quarterly deficits continue, Instagram is growing faster, and Snap posted disappointing financial results in back-to-back quarters -- a bad look for a rookie growth stock. However, as long as Snapchat's audience keeps growing, it's going to be hard to keep the content creators and eventually the advertisers away. Snap is already making progress on that front with average revenue per user more than doubling over the past year. As more proprietary content begins to launch, it will make Snap stickier for users and hard to resist for marketers. Snap may be out of favor on Wall Street, but reality may be painting a more favorable portrait of Snapchat's growing appeal.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.