Meta Platforms’ (Nasdaq: FB) flagship Facebook announced on Tuesday that it is expanding the availability of its short-form video asset Facebook Reels in more than 150 countries. Prior to this, Facebook Reels has only been available in the US since September 2021.
Why is this significant? The move is a clear bid to take market share away from the Chinese short-form video platform TikTok.
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” said Meta Platforms CEO Mark Zuckerberg in the firm’s Q4 2021 earnings call. “And this is why our focus on Reels is so important over the long-term, as is our work to make sure that our apps are the best services out there for young adults.”
TikTok has found a resurgence in its popularity during the pandemic. In July 2021, it became the first non-Meta Platforms app to reach 3 billion downloads globally. According to the research platform Sensor Tower, the app has consistently been on the rise in terms of consumer spending – “surpassing US$2.5 billion globally.”
Reels, launched first on Instagram in August 2020, first aimed to take a slice of the short-form video market. It incorporates similar functions to TikTok like using vertical frame, AR-powered effects, use of audio, and in-app video editing.
In a podcast interview, Instagram head Adam Mosseri admitted that the app has “a long way to go” and “TikTok is ahead” of the competition. In February 2021, Instagram also announced that its algorithm will no longer promote Reels that have TikTok watermark on the videos, encouraging its own creators to use in-app assets and start their own trends on the platform.
While Instagram gained ground in the short-form video battle, TikTok is still ahead in engagement and advertising revenue.
In a study done by influencer marketing agency Markerly analyzing the same posts in TikTok and Instagram Reels by influencers and brands, the former sustains higher engagement for celebrities but the latter has a relative advantage in user engagement for brands.
“When looking at brands, Reels received higher engagements and we speculate that’s due to the presences they’ve established and cultivated for significantly longer than on TikTok,” said Markerly co-founder Justin Kline.
But with Reels being Meta Platforms’ “fastest-growing content format,” the move to expand it to Facebook seems to be the logical next step.
“[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,” added Zuckerberg. “So I’m optimistic that we’ll get to where we need to be with Reels, too.”
In addition to launching Facebook Reels globally, the company also announced its Reels Play bonus program that “pays eligible creators up to US$35,000 a month based on the views of their qualifying reels,” similar to TikTok’s Creator Fund.
Facebook Reels will also employ Stars to give users a way to support their favorite creators monetarily, much like TikTok and its virtual gifts. In addition, the format will also include remixing of videos (similar to TikTok’s function of using another video to post side-by-side with one’s own video) and expand the length of videos to 60 seconds.
Like with the company’s strategy when it first launched Reels on Instagram, Reels on Facebook will be practically available in most of the app’s formats like Stories, Watch, and Suggested Feed.
What does this mean for the rivalry? While Facebook still holds the title as the world’s most-used social platform, TikTok has been rivaling the social media giant in terms of number of usage hours–an important factor on potential advertising revenue for video content.
In a similar fashion, Instagram launched Stories in August 2016–its own answer to the ephemeral video-focused platform Snapchat. Facebook adopted the format as well in its own app, effectively taking a huge slice in that content space.
Meta Platforms last traded at US$202.08 on the Nasdaq.
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