Time Warner (NYSE:TWX) is reportedly planning to invest $100 million in shows and advertising on Snap Inc.’s (NYSE:SNAP) Snapchat over the next two years. The information comes from a person familiar with the matter who asked not to be identified discussing private information. Nick Bell, vice president of content for Snap, appeared to confirm the news in a statement, saying, “This partnership is another exciting step as we continue to branch out into new genres, including scripted dramas, comedies, daily news Shows, documentaries, and beyond.”
According to a statement from both companies, Time Warner will make shows for Snapchat in multiple genres, including scripted dramas, comedies, and documentaries. The shows will be produced specifically for Snapchat’s vertical format, since that is how most of its users view videos on their phones. Eventually, Time Warner plans to make as many as 10 shows a year Time Warner will split the advertising revenue from its shows evenly with Snap.
Time Warner’s properties, including HBO, Turner, and Warner Bros., will also invest in advertising on Snapchat. For example, Warner Bros. will likely market its upcoming movies on Snapchat as part of the deal.
The partnership comes at a crucial time for Snap. Building a library of original shows should help users stay on the app even longer. The media giant wants to use the social network to reach young audiences, which are harder to find these days on TV. The deal sent shares of Snap climbing nearly 3 percent on Monday. The company’s shares have fallen 26.9 percent since it went public in early March.
The news of the deal comes as Time Warner awaits approval to be acquired by AT&T. AT&T bid $85.4 billion to purchase Time Warner, with half of the deal in AT&T stock and half in cash. The talks between the companies began last August, but the deal has yet to win enough approvals for completion.