Instagram has offered lucrative deals to some of TikTok’s top video creators to switch to its new competing service Reels, which parent company Facebook plans to debut early next month. According to sources, potential payments for some creators could be “in the hundreds of thousands of dollars.” Similar to TikTok, Reels is a platform that allows users to share short-form video content. Some TikTok creators have amassed large followings, and have been paid by brands to promote products, wear branded clothing or use specific songs.
The Wall Street Journal reports that, “to counter the Instagram push, TikTok announced a $200 million fund on Thursday that will help creators on the platform ‘realize additional earnings that help reward the care and dedication they put into creatively connecting with an audience that’s inspired by their ideas’.” According to Jiminy, TikTok is largely popular in the youth demographic, with “70 percent of 10-year-old girls with smartphones in the U.S. using the app in 2019.”
In addition to Facebook’s announcement, YouTube said it is “testing new features that resemble video options available on TikTok.” Prior to Reels, Facebook launched short-video app Lasso in 2018, which it shuttered earlier this month.
The ByteDance-owned TikTok is also the subject of scrutiny by the Trump administration, which accuses it of providing data to the Chinese government. Evincing concern about TikTok’s future in the U.S., even TikTok creators that haven’t received offers from TikTok plan to sign up for Reels. Instagram’s offer to TikTok creators comes with the caveat that, if they don’t post exclusively to Reels, they will still post there first, dubbed “first looks.”
In addition to payment, “Instagram is also offering to cover the costs of producing their videos.” According to one source, “Instagram has used nondisclosure agreements to dissuade creators from sharing the terms of the potential deals.”
USA Today reports that the Reels app is “currently testing in France, Germany, Brazil and India but will hit smartphones in the U.S. in early August.” Reels houses “a ton of video editing features, and it connects to Instagram, allowing users to share the finished product to their Stories.” If the user’s Instagram account is public, “the video can appear on the app’s Explore section … [and] users will also be able to post edited Reels on their profiles.”
YouTube’s Latest Experiment Is a TikTok Rival Focused on 15-Second Videos, TechCrunch, 6/25/20