What Is Spotlight? Snapchat's TikTok Rival Explained

Snapchat's TikTok competitor Spotlight reached more than 100 million monthly active users in January, CEO Evan Spiegel confirmed on Thursday.

The platform, which is built into the main Snapchat app, is a relative newcomer to the market, launching on November 23 last year, roughly three months after Facebook unveiled its own service designed to compete with TikTok: Instagram Reels.

At its core, Spotlight lets users share video content created using the app's camera, or watch popular short-form clips uploaded from other accounts.

Like TikTok, which remains the dominant app in this space, Spotlight uses algorithms to surface the uploads users are likely to be interested in based on a number of factors, including the amount of time watched and if videos are shared with contacts.

What sets Spotlight apart from rivals at this stage is that it offers financial incentives to upload creative posts, and the company said it distributes more than $1 million every day. Rewards are based on a "proprietary formula." It takes into account the number of unique video views a video gets compared to other users' uploads that day.

"Many Snapchatters will earn each day, and the ones who create the top Snaps within that group will earn the most," as the company said in its first announcement. To use this feature, the users must be 16 or over and have obtained parental consent.

In a Q4 2020 earning call on Thursday, Snap executives said there are currently more than 175,000 videos being submitted to the in-app platform per day on average, noting this is likely to be "in part" due to the financial incentive program for the creators.

Spiegel said the team has been "very pleasantly surprised with the momentum" of the platform and said engagement appeared to be growing among the community.

The CEO said: "Admittedly, I think we started with some great raw ingredients, meaning, we have such a widely used camera with over five billion snaps made every day and an incredibly creative community and, of course, a really large audience that loves watching mobile content. So, maybe we should have expected it."

"But, so far, it's really off to the races with over 175,000 video submissions every day and an audience of over 100 million people in January," Spiegel continued.

Snap said in its Q4 2020 report that the app's daily active users increased 22 percent year-over-year, reaching a total of 265 million. The total audience still pales compared to TikTok, which remains a dominant fixture of the short form video market.

CNBC reported in August that TikTok had more than 100 million monthly active users in the U.S. alone. Globally, however, TikTok had close to 700 million active users as of July 2020, while also boasting more than two billion downloads across the world.

A picture taken on October 1, 2019 in Lille shows the logo of mobile app Snapchat displayed on a tablet. Snapchat’s TikTok competitor Spotlight reached over 100 million monthly active users in January, CEO Evan Spiegel confirmed in its Q4 2020 earnings. DENIS CHARLET/AFP/Getty