In February, as Meta navigated some stock market turbulence, its founder and CEO announced a pivot (back) to video. About three months later, Mark Zuckerberg delivered an update on that pivot’s status. During Meta’s Q1 2022 earnings call, Zuckerberg said that Instagram users now spend 20% of their time on the app watching Reels.
The rise of Reels is a step forward in Meta’s bid to seize the short-form throne. As part of that initiative, the tech giant has copied several of TikTok’s popular features, including its signature video format. A significant amount of the content people are watching on Reels originated on TikTok, though recent algorithmic changes are likely to highlight Instagram’s own creative community.
The imitation doesn’t stop there. Meta is also adjusting its recommendation algorithm in search of the secret sauce that makes TikTok so addictive. According to Zuckerberg, that research is already paying off. “Being able to accurately recommend content from the whole universe that you don’t follow directly unlocks a large amount of interesting and useful videos and posts that you might have otherwise missed,” the Meta CEO said during the recent earnings call. “The AI that we’re building is not just a recommendation system for short-form video, but a discovery engine that can show you all of the most interesting content that people have shared across our systems.”
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Overall, Meta’s shifting priorities are directing users to videos all across its owned-and-operated platforms. Zuckerberg said that Facebook users spend 50% of their time watching videos. As always, we must take these figures with a grain of salt. Meta has a history of fudging these kinds of numbers, especially when video is involved.
If you want some more reliable indicators of Meta’s wellbeing, look to the stock market. The company’s earnings call revealed a 4% increase in the number of daily active users on Facebook, up to 1.96 billion. That outdid expectations and triggered a surge in Meta’s stock price. As of this post, the company’s shares were up nearly 15%. If that number holds, it will be Meta’s biggest single-day Wall Street uptick in six years.
A favorable quarter is a welcome sight for Meta, which had a rough fourth quarter last year. Its audacious rebrand, which attempted to showcase its virtual reality happenings, got off to an auspicious beginning. Though Zuck and his tech empire have righted the ship by focusing on a tried-and-true industry, that doesn’t mean things are faring better in the metaverse. The first-quarter earnings call included a note about Meta’s Reality Labs division, which lost about $3 billion over the three-month period.