Both companies have said that they are shifting their focus to short videos, while Indian startups are still gaining users in their development stage.
On July 26, a tweet from Instagram head Adam Mosseri confirmed the platform’s change in focus on video, and was confirmed by Meta CEO Mark Zuckerberg and other top executives on its earnings call a day later. Google’s parent company Alphabet also said in its earnings call earlier this week that YouTube Shorts averaged 30 billion daily views globally and the company was “excited” about the opportunity it presented.
The move may have been inspired by the global success of ByteDance-owned TikTok, but industry experts say they will certainly put Indian platforms 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 techniques that influencer marketing experts and creators love to develop platforms.
The big two, according to experts, are the “go-to” option for advertising. Some influential firms even say they tell their clients to avoid short short-video platforms. “If you ask me, removing TikTok from India only helped Instagram and YouTube. And now, they will grow up,” said the head of an influencer marketing firm.
According to a Reuters report earlier 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 competes with TikTok to monetize their platform. But, they do not have much competition in India. Most small, home platforms have a huge amount of cringe content—not suited for brands or creators who want to monetize their work. This leaves Instagram with a clear path to monetize in a market like India,” said Shudip Mazumdar, founder and CEO of influencer marketing firm, Zefmo.
Mazumdar’s assessment is supported by independent creators, investors and others in the industry. Comedian Shubham Gaur said that he was offered an interim contract by MX Takatak (now owned by ShareChat) about a year ago, but he eventually left the partnership.
“While they clearly increased my discoverability on the platform, there was no cross-promotion on the platform, and the recognition being built on it was limited by 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. It did not disclose the value of the deal, but said the financial incentive was “too small”.
GD Prasad, Founder of home food items brand VS Mani & Co and former Vice President of Dentsu Webchutney said, “At the moment, reels are a very good way to establish your brand presence and identity, however we are with increasing results. running ads on it.”
To be sure, Instagram’s pivot to video is not an immediate threat to Indian platforms. Anurag Ramdasan, head of investment at venture capital firm 3one4Capital, said Mohalla Tech (parent firm to ShareChat, Moz and MX Taka) and Versace Innovations (Josh) will both have runway to monetize their platforms and take the reins. next two years.
The question, however, remains how the current funding winter will affect these firms. A former executive of an Indian short video firm said the burn rate for a short-video startup can be as high as $15-20 million a month. YouTube and Instagram may absorb such loss and make up for some of it through existing partnerships and revenue sources.
Ramadasan noted that Instagram’s “deep financial support” could eventually help it move forward with its 10-year monetization plan with Reel. Some Indian platforms like Bolo Live and InMobi’s Roposo are already geared towards live video instead of shorts, while Moz also announced the launch of live video streaming earlier this month.
Meta itself agreed in its earnings call that Reel is in a very early stage of monetization. But Zuckerberg said the platform’s views grew 30% sequentially, and that it has passed $1 billion in annual revenue from reel ads globally. Reels was launched globally in February this year itself and India was among the first countries to get the platform last year.
Meta’s India head Ajit Mohan said last July that Indians uploaded 6 million short videos to Instagram every day at that time. Not only that, Zuckerberg said that Reels had a “higher revenue run rate” than Instagram Stories at “the same time since launch.” Given that Stories is one of the platform’s most successful products to date, it’s a clear sign that the meta will be pushing more resources to the reels.
A Meta spokesperson, in response to a query by Mint, said that India is “one of the leading markets” for reels, and brands such as Maybelline and L’Oreal have “used reel ads to increase brand recall among young users”. “
Abhinav Jain, vice president of InMobi-owned live video platform Roposo, said the platform uses live commerce to monetize its platform. The company started with short videos, but shifted to live video e-commerce.
Jain said Roposo has over 500 creators monetizing, with “over 350 brands” partnering with creators on the platform.
Moj declined to comment, while Josh did not respond to emailed questions until going to press.
YouTube announced a $100 million “shorts fund” for creators in April. Google Senior Vice President and Chief Business Officer Philip Schindler called the fund a “first step” to monetize Shorts.
“We are testing ads on Shorts with products like app installs and Video Action campaigns and we are encouraged to do so,” he said.
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