Facebook Offering Substantial Financial Incentives To Bring TikTok Talent On Its 'Instagram Reels' Platform

Facebook Inc FB subsidiary Instagram has attempted to draw popular TikTok creators to its own competing short-form video service Reels by offering financial incentives, the Wall Street Journal reported Tuesday.

What Happened

The social media platform has offered payments in the range of hundreds of thousands of dollars to some of the most popular content creators on the ByteDance-owned platform, people familiar with the matter told the Journal.

Instagram approached “a diverse range of creators about Reels in several of the countries where it’s currently being tested,” a company spokeswoman admitted to the Journal.

The Menlo Park, California-based company told creators in the past month that it hoped to launch Reels with posts from popular creators and was offering larger inducements to artists who agree to post exclusively on its platform, according to one of the Journal’s sources. 

Why It Matters

Instagram plans to launch Reels in the U.S. and 50 other markets next month. The service is already operational in several of its key markets, such as Brazil, France, Germany, and India.

The Mark Zuckerberg-led social media giant's attempts to ensnare TikTok's creators come at a time when the Donald Trump administration is weighing its options to ban the Chinese video app, using presidential powers intended to regulate foreign companies that pose extraordinary threats.

Alphabet Inc’s GOOGL GOOG video streaming service YouTube and Snap Inc. SNAP subsidiary Snapchat are also reported to be testing features similar to TikTok to capitalize on the app’s popularity with younger users.

Price Action 

Facebook shares closed 1.45% lower at $230.12 on Tuesday and fell another 0.4% in the after-hours trading.

Photo by Annie Spratt on Unsplash