The business model for SnapChat is the same as for TV ads (and for YouTube). Intersperse branded video advertising before the user can get to the content that they're actually seeking. TV ads is a $60-80B business. People in the 18-34 demographic (which in SnapChat's case really means the 13-29 demographic - I don't know anyone over the age of 30 that actually uses SnapChat) already spend 8x as much time on SnapChat as on TV. At some point, that attention imbalance will equilibrate, and SnapChat will be making a lot more than TV networks are.

It's a possibility. They can just jump apps easily in this sector as it's more ephemeral by nature. What's odds of SnapChat staying popular enough for high-profit if they start interrupting conversations with video ads and alternatives exist? I imagine something similar to when SMS limitations were bullshit but WhatApp existed.

That was what I said about Facebook when they came out (I'd been an early user of LiveJournal and AIM, a bunch of my friends were on MySpace, and I saw people migrating en masse between social platforms as they got bored with the previous one). I figured that the biggest risk to them wasn't irrelevance, it was that someone newer & hotter would come along.

Turns out I was right - much of the Instagram and SnapChat usage is coming out of the pool of attention that previously belonged to Facebook - but the cycle time seems to be ~10 years, and getting longer with each generation of social software. If the history of mass culture & mass consumerism repeats itself, eventually the cycle time will be greater than a generation - forms of social interaction for the baby boomers stayed roughly constant for their whole lifetime. At that point it's meaningless to talk about shifts to the next big thing, because we'll all be dead before they happen.

I remember hearing exactly the same about Facebook and even ... Google. Can't find the link anymore but there was a famous article from the NYT (IIRC) saying Google problem was finding a business model. Time will tell for snapchat.