Instagram Paying Media Companies to Create Popular Reels

Instagram is opening its wallet to media companies that can generate viral Reels, even as it cuts back on personalization. The step is the latest development as the Meta Platforms social app continues to experiment with its configuration, including algorithms and UI. On Thursday, the company said it will discontinue the full-screen feed it has been beta testing and will also be scaling down plans to increase force-fed recommendations. This rather abrupt reversal is said to be in response to the public criticisms of potential updates by users and notable influencers.

Instagram’s whiplash shift points up a broader industry dilemma, as social media platforms that grew around personalization now must balance that with a need for reach and commercial success.

“The TikTok-ification of Instagram took a step back,” DigiDay writes. But “Instagram is still putting its shoulder into video — continuing to aggressively develop and promote Reels, the TikTok-style feature that lets users record and share videos of up to 90 seconds,” Variety reports.

At under 90 seconds, Instagram Reels are a fraction of TikTok’s maximum allowable video length, recently expanded to 10 minutes. (Instagram also allows 10-minute videos, but not as Reels). With Instagram paying media companies for Reels, a development DigiDay writes “has taken some media executives by surprise,” Reels may become even more commercial.

Calling the outreach to professional media firms a “controversial pivot,” DigiDay reports “Instagram is paying media companies for posting Reels that reach certain view count thresholds.” In this, it expands on a program introduced last year offering financial remuneration to individual creators that qualify as “influencers” by exceeding designated viewing thresholds.

In March, TikTok expanded its vids to allow 10 minutes, a concession to advertisers despite the short attention span of its users.

TikTok’s ad revenue is expected to triple to $11.6 billion this year, while Meta’s ad revenue, including Facebook and Instagram, “was $115 billion in 2021,” writes The Observer, noting “if TikTok reaches its forecasted revenues, it will own 1.9 percent of all digital advertising, compared to Meta’s 21.4 percent. Google leads them all with 29 percent.”

Meta’s short-form Reels are alone “making faster progress than expected — reaching $1 billion annual revenue run rate in the second quarter,” writes Fierce Video, noting that the format “doesn’t yet monetize at the same rate as Instagram’s Feed or Stories,” though it quotes Meta CEO Mark Zuckerberg saying the Reels revenue is growing faster “than what Stories had at identical times post-launch.” Stories are limited to 15-seconds, while Feed videos can be up to 10 minutes.