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December 14, 2020

Dubsmash acquisition will help expand Reddit’s reach

By MarketLine

The recently announced Dubsmash deal provides Reddit with a stake in the rapidly expanding short-form video sharing market. The Dubsmash app, popular amongst younger audiences, allows users to create video content and share it within the community. The financial details of the deal have not been disclosed but the popularity of TikTok suggests that entering the growing market is a wise move by Reddit.

Founded in 2015, Dubsmash has managed to grow at a reasonably healthy rate despite the dominance of ByteDance’s TikTok, which has expanded exponentially in recent years. The Dubsmash app currently sees over one billion video views per month, passing the milestone in January. However, this pales in comparison to TikTok which has 37 billion monthly views in the US alone.

TikTok still has a healthy lead

Despite this, the app is second to TikTok in the US short-form video market by app installations pointing towards a shrewd investment by Reddit. The acquisition will give the firm a good platform to gain an edge on rivals in the crowded short-form video sharing market.

The New York based platform will keep its own separate app and brand but Reddit is expected to integrate its video-creation tools into its own app as well. Dubsmash co-founders Suchit Dash, Jonas Drüppel, and Tim Specht, will join Reddit with immediate effect.

Reddit, famous for its message board format, recently declared that it had 52 million daily active users an increase of 44% year-on-year. The addition of short video is a strategy to boost that number further and encourage current users to spend more time on the app.

Since 2017, when Reddit launched native videos, the firm has highlighted how app usage has increased sharply. But the majority of content is still text based so this deal will help the app to build a more sophisticated in app video service which it expects users to respond positively too.

Investment in short videos has been popular amongst other social media platforms as well, spurred on by the success of TikTok. Facebook’s Instagram launched “Instagram Reels” recently and Snapchat introduced “Spotlight” in November whilst Google owned YouTube introduced their own product to compete in the market. Clearly demonstrating that this is where firms see the future of social media.

Not only this, in August, The Information reported that Facebook and Snap Inc. had approached Dubsmash over a potential acquisition but this did not go through allowing Reddit to swoop.

Dubsmash acquisition will boost Reddit’s drive for audience inclusion

The app is notably popular amongst women and diverse audiences. Reddit stated that women make up 70% of the app’s users and almost 25% of black teens in the US use the app.

Reddit CEO, Steve Huffman, believes the deal demonstrates the firm’s drive for greater inclusion of different groups. He stated “Dubsmash elevates under-represented creators, while Reddit fosters a sense of community and belonging across thousands of different topics and passions” which together could have a powerful impact.

With Reddit’s acquisition bringing Dubsmash to more people’s attention, its representation of a more diverse audience may attract users from rival apps.