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Instagram head Adam Mosseri says the social media platform is moving forward with what Reels is doing after its parent company Meta was liquidated at an $80 billion market value last month.
In an interview with Bloomberg on Friday, Mosseri said that Instagram is actively pushing money to Reels as the platform continues to follow TikTok’s dominance in short video.
Instagram is moving “very fast,” Mosseri said Bloomberg. “I’m trying to balance that momentum and make sure we don’t make a mistake by pushing too hard or too fast.”
In an interview, Mosseri said that the growing popularity of Reels is promising. The time spent watching videos on Instagram, he explained, “is one point.”
But now, the company needs to hit the “double mark” and offer Reels ads in order to quickly earn money from other places that marketers can spend on the app. Instagram aims to make more money through Reels by making advertisers more familiar with the format, encouraging creators to share there, and improving the algorithm to improve content. of users from untracked accounts.
“The proprietary system that tries to publish what we call photos and videos from sources from you, accounts that you don’t even have, is a different technical problem than photos and videos from accounts you’ve followed,” Mosseri said. “I’m encouraged by the progress, especially in the last six months, but I think there’s still a lot of room to grow.”
“We’ve reached the first level – we’re doing well but we haven’t reached the second level yet.” he added.
In the Race For Meters
Meta’s stock price is down about 73% this year. In October, the company’s shares fell to their lowest price since 2016 after it said third-quarter profits had halved.
Meta struggled as the company grappled with slowing global economic growth, increased competition from TikTok, and challenges from Apple’s iOS privacy update that reduced its model first read.
Investors are also skeptical of Zuckerberg’s bet that the company’s future lies in Reality Labs, its metaverse division. Despite high spending, Reality Labs lost $3.7 billion in the last three months.
Zuckerberg said that “Reality Labs losses in 2023 will grow significantly every year” and the division will not see a return on investment for another decade – alarm among investors and analysts.
However, amid these struggles, Instagram remains a growth driver for the company. In a third quarter earnings report, Meta said Instagram has two billion monthly active users worldwide, closing in on Facebook’s 2.96 billion.
During the earnings call, Meta CEO Mark Zuckerberg said that Reels appears to be the fastest growing across Meta’s family of applications and services, which has reached $3 billion in revenue. revenue rate (ARR) in the third quarter of 2022. He also said that the production and consumption of Revolvy is 50 percent more than six months ago.
“On Instagram alone, people have shared Reels a billion times a day via DMs,” Zuckerberg said.
However, Meta’s CEO says monetization of the format is still a challenge and Instagram’s Videos currently don’t have as much ad revenue as Stories and feeds.
He revealed that Reels was costing Meta more than $500 million in lost revenue per quarter. But the company expects to break even with Reels “over the next 12 to 18 months.”
It remains to be seen if Instagram’s experiment with short videos will pay off. But the longer Meta takes to make Reels profitable, the less patient investors will be with the money Zuckerberg is pouring into the metaverse.
Photo credits: Headline by Anthony QuintanoCC by 2.0
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