Investors sent share prices for Snapchat maker Snap Inc. down more than 5% Wednesday after eMarketer projected that the service will lose monthly U.S. users for the first time in its history this year. This comes a week after Snap announced a range of new initiatives designed to boost reach at its first-ever Partner Summit in Los Angeles.
eMarketer projected Wednesday that Snap will have 77.5 million monthly users in the U.S. this year, down 2.8% from last year. The company had previously projected that Snap’s U.S. user base would grow 6.6% this year, reaching a total of 90.4 million monthly users.
The market research company attributed some of the decline to the backlash Snapchat faced over last year’s bungled redesign roll-out, but said that even changes instituted as a result to the backlash weren’t enough to reinvigorate growth. “Snapchat user growth will plateau in 2020,” eMarketer projected. “Between 2019 and 2023, we forecast that Snapchat will only add 600,000 new US users.”
The primary beneficiary of Snapchat’s struggles will be Facebook’s Instagram, which is slated to add nearly 19 million new users in the U.S. by 2023, according to eMarketer.
Snap used its Partner Summit last week to introduce a range of new initiatives designed to boost engagement and reach. This included the introduction of games on Snapchat, new original content and partnerships with other app makers to bring Snapchat Stories to their apps. The company also announced some revenue-focused initiatives, including an ad network that will bring Snapchat’s 6-second video ads to third-party apps and services.
During the event, Snap CEO Evan Spiegel also made a point of comparing Snapchat’s reach to that of other social networks. The company reached 90% of all 13- to 24-year-olds in the U.S., Spiegel said. “In fact, we reach more 13- to 24-year-olds than Facebook or Instagram in the United States, the United Kingdom, France, Canada, and Australia.”