It's hard to fathom that Chinese short viral video app TikTok, that went international only four years back, is giving Facebook a run for its money.
Meta Platforms (FB) Chief Executive Mark Zuckerberg has teed up his focus on its own TikTok like feature Reels and spoke about getting hammered by competition in his latest earnings call.
Zuckerberg said competition from rival TikTok is having an impact on Meta's business. "People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term," said Zuckerberg during Meta's fourth quarter earnings call earlier this month.
To fix that, Facebook is now replacing some time in its News Feed and other higher monetizing surfaces towards short-form video like Reels.
And Reels was also listed as Facebook's top investment priority for this year.
And the Menlo Park, California-based company has just launched Reels globally across more than 150 countries on Tuesday.
"It’s already the biggest contributor to engagement growth on Instagram and it’s growing very quickly on Facebook too... So looking ahead, we’re investing in simplifying video across Instagram, building more great creative and monetization tools for creators, and helping more people discover and interact with relevant Reels," said Zuckerberg.
Meta has also launched a bonus program, as part of its $1 billion creator investment, that will pay eligible creators up to $35,000 a month based on the views of their qualifying reels.
Meta first launched Reels on Instagram in 2020 and on Facebook in 2021 in response to widely popular short-video app TikTok.
"And while video has historically been slower to monetize, we believe that over time short-form video is going to monetize more like feed or Stories than like Watch – so I’m optimistic that we’ll get to where we need to be with Reels too," Zuckerberg added.
Meta Chief Operating Officer Sheryl Sandberg said the company's successful transition from web to mobile and News Feed to Stories will help pave the way for the company's shift to Reels.
"Right now, Reels monetizes at a lower rate than Feed and Stories, but we expect this to improve over time. We’ve made successful transitions before – the shift from web to mobile, and then another shift from Feed to Stories. We have a playbook here. The experience we have from monetizing Stories is directly applicable, so we’re not starting from scratch. We think that over the long term this shift will be a success for us and our partners too," said Sandberg.
The Dizzying Rise of TikTok
Last year in September, ByteDance said more than 1 billion people use TikTok every month.
"TikTok has become a beloved part of life for people around the world because of the creativity and authenticity of our creators," the company said in a blogpost. "Our global community is remarkable in its ability to reach millions of people, across generations. From music, food, beauty and fashion to art, causes, and everything in between, culture truly starts on TikTok."
The app was also the most downloaded non-game app in August 2021, according to Sensor Tower, an analytics firm.
TikTok has benefitted from the coronavirus pandemic because of its humorous and quirky mix of content that is helpful in a crisis.
Charli D’Amelio, who started posting videos of herself dancing on TikTok in 2019, raked in $17.5 million last year, according to Forbes and became one of the highest-earning TikTok stars of 2021.
With 133 million followers on TikTok, she makes her money from a clothing line and promoting products in TikTok videos and other ads.
Altogether, the highest-paid TikTok stars, that are all under the age of 25, collectively earned $55.5 million in 2021, Forbes reported.
