Is short-form video a content trap?
Future News 131
With more than 9 million followers, over 70 million likes and 200 million views on TikTok, you would be expecting a big pay-day from the short-from video platform. For KSI, the YouTuber-turned-boxer-turned-musician, that apparently hasn’t been the case.
The Sidemen co-founder has reportedly made just £3,000 ($3,761) for his endeavours on TikTok. Though it may not be directly lucrative for some creators, the allure of the smartphone-friendly platform has attracted one billion monthly global active users.
In doing so, TikTok has forced the social media giants of YouTube and Meta to embrace short-form video. For the incumbents it is a natural and seemingly sensible reaction to a competitor that has crashed the space, owning the children and young teenagers demographic in the process.
But a review of recent investor reports reveals that the short-term video pivot could prove to be a long-term folly for those who overcommit to the space. The key issue for YouTube, Facebook, Instagram and any other platform looking to play in the sector is monetization as the short-term video ad market is still effectively being constructed.
Take Meta’s commentary on Reels, the up-to 60-second-long video product which went global in February: “One near term challenge is the growth of short-form video. Reels doesn't yet monetize at the same rate as feed or stories, so in the near term, the faster that Reels grows, the more revenue that actually displaces from higher-monetizing surfaces,” Mark Zuckerberg said.
“Now in theory, we could mitigate this short term headwind by pushing less hard on growing Reels, but that would be worse for our products and business longer term since we're confident that Reels will grow engagement overall and quality will eventually monetize closer to feed.”
The Meta CEO did however stress that Reels ads had surpassed a $1bn annual revenue run rate, and had a higher run rate that Stories did at the identical times post launch. But the message, including the build of a new AI-powered discovery engine, was clear: it’s a work in progress. Alphabet echoed these sentiments when it came to YouTube Shorts, which receive 30bn daily views and are the company’s own answer to the short-video drive.
“...Early results in Shorts monetization are also encouraging, and we're excited about the opportunities here,” Philipp Schindler. Google’s Chief Business Officer, told analysts in late July. YouTube has helped the product get off the ground with a $100m YouTube Shorts creator fund, which was launched last May, while the lack of manhours and smaller production costs creates its own allure for would be content creators.
But will quantity eventually trump quality and, if all variables remain equal, will the likes of YouTube really prioritise Shorts over mid-roll friendly videos (eight minutes or longer) in their discovery section.
In her last public back-and-forth with financial analysts, the now ex-COO of Meta Sheryl Sandberg neatly summed up the state of the market: “…at the end of the day, advertisers are chasing ROI; they're going to go where they get a return on their investment. And while this still monetizes at a lower rate versus Feed and Stories, advertisers who are using it are seeing really promising results…”
It all comes down to revenue at the end of the day.
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