Mark Zuckerberg stated that Reels had a $3 billion annual revenue run rate across Instagram and Facebook
The brief video feature known as Reels, which is offered by Meta, brings in an average of $3 billion in annual revenue: Zuckerberg, Mark. the short-form video that is featured on Meta. Mark Zuckerberg, the chief executive officer of the firm, mentioned during the earnings conference call that took place on October 26 that Reels had a revenue run rate of $3 billion annually between Instagram and Facebook. Due to the fact that users all over the world are watching more and more short videos, Facebook’s Reels feature has become an extremely important engagement tool for the company as it competes with other platforms, such as TikTok and YouTube Shorts.
However, Facebook’s parent company needs to earn money off of Reels in order to continue the process of reorienting its products toward short-form videos. This is being done in response to the increasing amount of time users spend watching videos on the website. In July, Zuckerberg announced that Instagram Reels had earned a billion dollars in revenue. This new development comes at a time when the dominant social networking company is experiencing a revenue decrease for two consecutive quarters for the first time in the history of the company as a result of a weak digital advertising market, and the company is expecting a revenue decrease in the current quarter as well.
Because video is often more difficult to market than other forms of media, Reels is expected to be a significant moneymaker for Meta in the long run; yet, it may limit the company’s revenue expansion in the short term due to the fact that video content is now more popular. During the call, Zuckerberg said again that the Reels format does not bring in money as quickly as the Feed format or the Stories format.
“Thus, as Reels expands, we are displacing money from surfaces with greater levels of monetization. Closing this (monetization) 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.
In spite of the progress that has been made thus far, he noted that the company is “choosing to take more than $500 million in quarterly revenue headwind” as a result of this shift and that it expects to reach a “more neutral point” during the next 12 to 18 months.