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By Alex Barinka
Meta Platforms Inc. is giving Facebook and Instagram creators a way to make money based on how many people view their videos, in a bid to boost the appeal of its content and lure users from rival TikTok.
The company said Tuesday in a statement it’s testing the new payout model with its short-form videos known as Reels, and is a move away from basing earnings solely on ads served to viewers. That should encourage creators to post more entertaining videos, and give users and advertisers more reasons to spend time and money on its apps.
Meta’s in a fight for screen time with rival TikTok, owned by ByteDance Ltd., known for its never-ending short-form video feed where users spend more time scrolling than any other social media app. Facebook and Instagram quickly duplicated the format, but while those platforms’ users are spending more time watching Reels, those videos don’t make money as efficiently as other places in the apps.
That’s created a drag on revenue for the business and lessened the potential cut shared with creators. In the third quarter alone last year, that cost Meta $500 million, the company said on an earnings call in October. Meta forecasts it can close that monetization gap by the end of this year or early next year. To do that, the company needs more users to watch and more advertisers to spend money for ads there, the company said on its latest earnings call.
