Meta spins Reels as the future against TikTok
The Future. To combat its sluggish stock price, Meta is betting that video — specifically Reels — will be its white knight. The problem is, TikTok is already the market leader in the space and shows no sign of slowing down. Even if Meta does succeed, European regulators may force the company to pull out over data rights… which would really handicap growth.
Video killed the social media star
Meta wants to turn the page by going all-in on video.
- Zuckerberg touted on an earnings call (which led to Meta’s infamous stock plunge) that pushing its TikTok-rival Reels is its (short-term) North Star.
- According to Meta, Reels is the biggest contributor to engagement growth on both Facebook and Instagram (but exact numbers are still unreported).
- But apparently, it’s also “cannibalizing” usage of the company’s biggest moneymakers — Facebook’s Feed and Stories features.
Zuckerberg noted that there’s a lot of work to be done in winning over creators and advertisers to Reels, but that the company has made those big pivots in the past.
But here’s the big roadblock in Meta’s way: TikTok. Meta successfully cloned Snapchat’s disappearing video feature (Stories), but TikTok is a lot more difficult to replicate. It is the most-downloaded app of 2021, reaches 63% of Americans between 12 and 17, and has a reputation with Gen Z for being cool (the opposite of Meta’s suite of apps).
And Zuckerberg knows it. In the earnings call, he admitted that “the thing that is somewhat unique here is that TikTok is so big as a competitor already and also continues to grow at quite a fast rate off of a very large base. Even though we are compounding extremely quickly, we also have a competitor that is compounding at a pretty quick rate too.”