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Both companies said they are renewing their focus on short videos, while Indian startups continue to acquire users in the growth phase.
On July 26, a tweet from Adam Mosseri, the head of Instagram, confirmed the platform’s shift in focus to video, and Meta CEO Mark Zuckerberg and other top executives confirmed the same at his earnings call a day later. Alphabet, Google’s parent company, also said in its earnings call earlier this week that YouTube Shorts averaged 30 billion daily views worldwide and that the company was “excited” about the opportunity it presented.
The moves may be motivated by the incredible global success of Bytedance-owned TikTok, but industry experts say Indian platforms are sure to come under pressure. Not only do Instagram and YouTube have huge user bases through their traditional platforms, but they also have proven and mature monetization tools and technologies that influencer marketers and creators prefer to grow the platforms.
The top two are the go-to options for advertising, according to experts. Some influencer firms even say they tell their clients to avoid smaller short video platforms. “If you ask me, the removal of TikTok from India only helped Instagram and YouTube. And now they’re going to be bigger,” said the head of an influencer marketing firm.
According to a Reuters report this month, Instagram already has 309 million users in India. In comparison, most Indian platforms currently have less than 200 million users, industry experts said.
“If you look globally, Instagram is fighting with TikTok to monetize their platform. But they don’t have much competition in India. There is a huge amount of cringe content on most smaller, homegrown platforms – which is not conducive to brands or creators looking to monetize their work. Thus, Instagram has a clear path to monetization in a market like India,” said Shudeep Majumdar, founder and CEO of influencer marketing firm Zefmo.
Mazumdar’s rating is supported by independent creators, investors and others in the industry. Comedian Shubham Gaur said he was offered a temporary contract by MX TakaTak (now owned by Sharechat) about a year ago, but eventually left the partnership.
“While they clearly increased my visibility on the platform, there was no cross-promotion on the platform and the identity built on it was limited to increased reach,” Gaur said. He has 340,000 followers on Instagram and although his profile still exists on MX TakaTak, he does not post content. He did not disclose the value of the deal, but said the financial incentive offered “was extremely small.”
G.D Prasad, founder of domestic edible brand VS Mani and Co. and the former vice president of Dentsu Webchutney, said: “Currently, Reels serve as a very good way to create presence and identity of your brand, although we run ads on it with increasing results.”
To be sure, Instagram’s move to video doesn’t pose an immediate threat to Indian platforms. Anurag Ramdasan, Head of Investments at venture capital firm 3one4Capital, noted that Mohalla Tech (parent of Sharechat, Moj and MX Taka Tak) and VerSe Innovations (Josh) will have the runway to monetize their platforms and take over Reels for the next two years.
The question, however, is how the current funding winter will affect these firms. A former executive at an Indian short video firm said the burn rate for a short video startup can exceed $15-20 million per month. YouTube and Instagram can absorb that burn and offset some of it through existing partnerships and revenue streams.
Ramdasan noted that Instagram’s “deeper financial support” could eventually help build on its 10-year monetization plan with Reels. Some Indian platforms, such as Bolo Live and InMobi’s Roposo, have already shifted to live video instead of shorts, while Moj also announced the launch of live video streaming earlier this month.
Meta itself agreed in its earnings call that Reels is in the very early stages of monetization. But Zuckerberg said the platform’s views have grown 30% over the course of the year, and Reels’ annual ad revenue worldwide has already topped $1 billion. The reels were only launched globally in February this year and India was among the first countries to get the platform last year.
Meta’s India head Ajit Mohan said last July that at the time, Indians were uploading 6 million short videos to Instagram every day. Not only that, Zuckerberg said that Reels has a “higher revenue rate” than Instagram Stories at “identical times post-launch.” With Stories being one of the platform’s most successful products to date, it’s a clear sign that Meta will be pushing more resources into Reels.
Responding to Mint’s query, a Meta spokesperson said that India is “one of the leading markets” for Reels and that brands like Maybelline and L’Oreal have “used Reels ads to increase brand awareness among young users”.
Abhinav Jain, vice president of InMobi-owned live video platform Roposo, said the platform uses live trading to monetize its platform. The company started with short videos, but has transitioned to live video e-commerce.
Jain said Roposo has more than 500 monetizing creators, with “more than 350 brands” working with creators on the platform.
Moj declined to comment, while Josh did not respond to emailed inquiries by press time.
In April, YouTube announced a $100 million “short film fund” for creators. Phillipp Schindler, Google’s senior vice president and chief commercial officer, called the fund a “first step” for monetizing short videos.
“We’re testing Shorts ads with products like app install campaigns and video campaigns and we’re getting support,” he added.