Reels, a brief video feature from Meta, generates $3 billion in annual income on average: Zuckerberg, Mark
Featured short form video on Meta During the company’s earnings conference call on October 26, chief executive Mark Zuckerberg stated that Reels had a $3 billion annual revenue run rate across Instagram and Facebook.
With the consumption of short videos among users increasing globally, Reels has been a crucial engagement tool for the social networking giant as it fights with rivals like TikTok and YouTube Shorts.
However, Facebook’s parent business must make money off of Reels because it is in the process of reorienting its products toward short-form video in response to rising video usage on the site. Zuckerberg revealed in July that Instagram Reels had generated $1 billion in revenue annually.
This development also occurs at a time when the dominant social networking firm is dealing with a revenue reduction for two consecutive quarters for the first time in company history as a result of a weak digital advertising market and is anticipating a revenue decline in the current quarter.
Reels will likely be a huge money maker for Meta in the long run, but it may hinder the company’s revenue development in the short term because video is typically harder to monetize than other media. Zuckerberg reaffirmed during the call that the Reels format doesn’t monetize as quickly as feed or stories format.
“Thus, as Reels expands, we are displacing money from surfaces with greater levels of monetisation. Closing this (monetisation) gap is obviously a top objective, but in my opinion, this is certainly the appropriate thing to do so that Reels can expand in line with the demand we’re witnessing. We prefer a tailwind over a headwind in this situation “said Zuckerberg.
Despite the advancements made thus far, he stated that the corporation is “choosing to take more than $500 million quarterly revenue headwind” with this transition and anticipates reaching a “more neutral point” over the following 12 to 18 months.