The company is expected to surpass TikTok in revenue in 2023 and become the dominant player in the short video field.
Reels, embedded in Facebook and Instagram, is not an independent short-video product, and the path to use it is hidden, but it has received great attention within Meta. the head of Instagram has said that Instagram will pay more attention to short-video, and will integrate all its video products around Reels. In February this year, Meta announced that it would open up the short video feature Reels to Facebook users in 150 countries around the world. two of Meta’s most important products all accept Reels.
According to Zuckerberg, Meta is going to “make significant changes to Instagram and Facebook to further lean towards video and make Reels a more central part of the experience.
Earlier this year, at Meta’s (previously known as Facebook) first earnings meeting, Zuckerberg named TikTok five times, and it was reported that Meta’s core product, Facebook, had stalled in user growth, its advertising business had declined, and its stock had plummeted 26 percent in one day, leaving the company on edge. To reassure investors, Zuckerberg said it was all because of TikTok.
Meta’s Q1 2022 results showed that users spent 20 percent of their time using Reels on Instagram and 50 percent of their time using Reels on Facebook. This has brought back the popularity of Meta.
For the time being, Meta is reluctant to put too much commercialization on Reels for the sake of optimizing the content ecosystem, but Reels has started to accept advertising.
According to Youssef Squali, an analyst at Truist, an American financial institution, Reels will generate $5.6 billion in revenue for Meta this year in the U.S. alone, relying on Facebook and Instagram, two big traffic killers. Its rival TikTok is expected to generate $5.96 billion in the U.S., a narrow gap. Once Reels is commercialized, it is expected to surpass TikTok in revenue next year.
According to market research firm eMarketer, if every minute of user interaction on Reels generated the same amount of ad revenue as Instagram, it would translate into $8 billion in revenue for Meta next year.
The Motley Fool reports that Reels will surpass TikTok in revenue next year.
