Dive Brief:

• Instagram Stories is on the rise and attracting more talent while views on Snapchat's marquee Stories feature are down anywhere from 15% to 40%, according to reporting by TechCrunch.
• Launched in August, Instagram Stories has often been labeled as a blatant Snapchat clone, but it's proving to be more appealing to people like influencers, who've seen their reach shrink on Snap. Snapchat also does little to accommodate social talent on its platform, sources told TechCrunch, which could hurt its bottom line. 
• In other Snapchat IPO news, Bloomberg reports that, like Twitter and Alibaba, Snap Inc. has chosen the New York Stock Exchange (NYSE) for its public stock offering.

Dive Insight:

News that Instagram Stories is siphoning talent and users from Snapchat's top-billed feature comes at a bad time for Snapchat's parent company, Snap Inc, which is gearing up for a long-planned IPO in March. The startup is expected to publicly file for its IPO later this week, which will give investors their first concrete look at its financials and inner workings. Analysts have suggested Snap's IPO could be worth anywhere from $20 to $25 billion, but some have suggested those figures are "hyper-inflated" and that Snapchat itself doesn't carry too much value.

Marketers are excited about Snap because of its youth-centric audience, made up primarily of millennials and Gen Z. But Recode reported earlier this week that Snap CEO and co-founder Evan Spiegel said around half of Snapchat's new users are over the age of 25. Recent Nielsen research shows that Snapchat is far from being the most-used social media app among millennials and Gen X, though being limited to mobile contributes to that lack of reach. 

Snap has been actively making moves to increase revenue offerings on Snaphat through expanded advertising products and targeting tools. The last thing the tech company needs in advance of its IPO is any chatter that its user activity is on the wane, especially if a direct competitor looks to be the cause of that decline. 

After Twitter’s successful IPO, a stagnating user base has become a major point of contention among its investors as well as Wall Street analysts who are keeping the once-powerful social media platform on edge with every quarterly report that fails to meet ever-lower expectations. A wide variety of social media insiders both on- and off-record in the TechCrunch article outlined falling views for Snapchat Stories.

Instagram was reported to have 150 million daily active users on its Stories feature a few months ago — around the same figure as Snapchat’s total audience, although the latter's numbers haven't been updated in awhile.