Answer originally written on Quora, where it won a knowledge prize.
There’s a lot at stake, since some major publishers (BuzzFeed, Cosmo) generate a significant portion of their traffic now through Snapchat. Cosmo generates as many views through Snapchat as it does on its main site. BuzzFeed gets 20% of its traffic.  Snapchat now has more users than Twitter by the way  .
Let’s first look at the UI to see what clues we can draw from it. You can often understand where a feature is going if you look at where it is, and the changes the company has put into it.
Here’s the current Discover screen (8/30/16):
Here’s the current Stories screen (8/30/16):
Discover stories have already migrated to the stories stream. The stories there focus on 2 use cases:
1) Additional content: you already watched all of your friends’ snaps and you want more. Here’s some click-baity stuff for you to look at.
2) “Live”: live is ‘in’ right now. YouNow follows Facebook Live follows Periscope, etc. People love looking into other people’s more interesting experiences from the comfort of their own home.
These are the same types of content you find on Discover page.
Discover used to be the bubbles from publishers, putting their name out their first, but the new shift focuses even more on the individual piece of news.
Snapchat’s new update of Discover offers a subscribe button at the bottom of each piece, I suspect pushes the content to the top of your feed and also provides a metric that Snapchat can use to show brands how effective maintaining a Snapchat presence is.
Discover right now is a source of revenue for Snapchat: brands pay Snapchat a percentage of their ad revenues to remain on the page . They can (or could at one point) also pay to take-over a publisher’s Discover channel, to the order of $50,000.  Not cheap.
But not everyone has seen value in Discover. Very high quality brands, like the NFL and the Onion, no longer seem to post on Discover, and some brands (eg Yahoo) have been kicked off the platform for not posting content.
Given how Snapchat is growing, it’s no surprise that Snapchat’s much bigger opportunity is providing ads in between Snaps, something that will generate $1B in revenue for them or more if they have it their way  . I suspect that makes the revenue generated by Discover seem like chump change.
It does matter to some brands though,
I’ve written before that Snapchat has a great forum for short form news, because it captures attention very well, especially from young people (see: Is Snapchat really a good place to read and discover news?)
Discover offers, at its core, a reason to stay on the platform after you’ve consumed all of your friends’ snaps. That’s important for Snapchat, whose sole business model is sucking up your attention and turning it into money.
I believe Discover’s ‘platform’ based news delivery will eventually be phased out in favor of a ‘feed’ based delivery, similar to the way the stories and live tiles are being used now. Why? People ultimately don’t care about the publisher, just the content.
I believe Snapchat will ultimately phase out the Discover tab as an idea, but how could it make it more relevant to a news source, or as a product:
Using Discover for vertically focused e-commerce:
‘But Ryan, commerce isn’t news.’ Sure it is. If Kylie’s hairstyle is news, the launch of a new product or a sale can be news. We don’t even need to argue on this one.
Snapchat recently bought Vurb, and I suspect a large reason they did so was to build out Snapchat’s integrations across other apps.
The idea here would be that certain kinds of e-commerce lend themselves incredibly well to Snapchat’s platform.
Totally doable, monetizable, etc.
They could change the core part of Discover to what’s happening around you right now:
“Super cute cat stuck in tree” Watch Live: “Skateboarding in your local park” Meet now: “Rare Pokemon at the convenience store” This will be hard due to the amount of content required, but there’s certainly a possibility of making it happen, especially if they can find a way to reward users creating the content.
The explore tab on Instagram has a similar reason for existing as the Discover tab: keep you engaged after you’ve gone through your feed.
Snapchat could basically pull the same trick off: start ordering Snaps that you’d like from the past 7 days that you can only see through the discover tab.
Since most news on Snapchat lasts 1 day, the ability to go further into the past could actually be a hook for people in the product.
Discover was an initial test by Snapchat to see how successful publishers would be on their platform. The test has gone well.
However, Snapchat will now focus on between Snap ads, which will become their largest money maker—this opens up some more speculative uses for the Discover page and feature.
The focus and deep attention provides some exciting possibilities for the platform.
1 Snapchat Discover One Year Later: How 23 Media Companies Are Building Stories For Evan Spiegel
2 Three questions publishers have about Snapchat Discover
4 Snapchat’s ad rates drop as brands find problems
5 Snapchat Launches a Colossal Expansion of Its Advertising, Ushering in a New Era for the App