Reels make up 20% of the time that people spend on Instagram, while video overall makes up 50% of the time people spend on Facebook, Meta CEO and founder Mark Zuckerberg revealed during the company’s latest earnings call with analysts.
“There are two key trends we’re seeing [with Reels]. First, the increasing popularity of short-form video, and second, the advancement of AI recommendations driving more of our feeds rather than social content,” said Zuckerberg.
Zuckerberg said a major shift is underway from feeds being almost exclusively curated by a user’s social or follow graph, to including more content recommended by AI. Accurately recommending content from sections of the ecosystem that users do not follow “directly unlocks a large amount of interesting and useful videos and posts that you might have missed otherwise”, he said. AI recommended content can apply to video, text posts, links, group posts and reshares on Facebook and to videos and photos on Instagram.
“The AI that we’re building [is] not just as a recommendation system for short-form video, but as a Discovery Engine that can show you all of the most interesting content that people have shared across our systems” he said. “In the future, I think that people will increasingly turn to AI-based Discovery Engines to entertain them, to teach them things, and connect with people who share their interests.”
Reels were launched on Instagram in August 2020, and on Facebook a year later. While monetization of Reels remains less than for Feed or Stories, Zuckerberg said Meta is focused on growing Reels as a major part of its vision for an AI-driven Discovery Engine. He said the media format transition of Reels was similar to that of Stories, which when launched in 2018, were also difficult to monetize at first.
“We’ve run this play before and we’re running it again now,” said Zuckerberg.
Meta’s total revenues increased 7% in Q1 2022 to reach $27.91bn, the company’s slowest quarterly growth rate since its public listing 10 years ago. Faced with growth headwinds such as Meta’s transition to short-form video, Apple’s iOS changes, e-commerce softness coming out of the pandemic, and the loss of the Russian market due to the war in Ukraine, Zuckerberg said Meta will slow the pace of investments on long-term projects like Reality Labs and AI infrastructure.
Meta will launch a web version of its metaverse platform Horizon later this year, aimed at making it easier for more people to access metaverse experiences from different platforms, and even if they do not have a headset. Last month, Meta raised the ire of creators when it was revealed the company planned to charge creators 47.5% of sales of digital assets and experiences made inside Horizons Worlds.
“Our other focus for Horizon is building out the metaverse economy and helping creators make a living working in the metaverse,” Zuckerberg told analysts. “We expect to be meaningfully better at monetization than others in this space.”
Total revenue: $27,91bn, +7% yoy
Users as of 31 March, 2022
Family (all platforms) daily active people (DAP): 2.87 billion, +6% yoy
Family (all platforms) monthly active people (DAP): 3.64 billion, +6% yoy
Facebook daily active users (DAU): 1.96 billion, +4% yoy
Facebook monthly active users(DAU): 2.94 billion, +3% yoy
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