Internal Documents Show Instagram Is Not Even Close To TikTok, Lags In Engagement: WSJ

Meta Platforms Inc META touts Instagram Reels as its answer to TikTok. However, Instagram users cumulatively spent 17.6 million hours a day watching Reels, less than one-tenth of the 197.8 million hours TikTok users spent each day on that platform, as per Meta’s internal documents, the Wall Street Journal reports.

The document, titled “Creators x Reels State of the Union 2022,” said that Reels engagement had fallen 13.6% over the previous four weeks and that “most Reels users have no engagement whatsoever.”

Instagram has struggled to recruit people to make content. Roughly 11 million creators are on the platform in the U.S., but only about 2.3 million of them, or 20.7%, post on that platform each month.

However, Meta said that it sees improvement in Reels engagement on a month-to-month basis with promising results and faster monetization than expectations. 

The shift to Reels assumed priority following a challenging year for Meta. In July, Meta reported its first-ever decline in revenue, in part thanks to Apple Inc’s AAPL privacy update affecting Meta’s ability to deliver personalized ads. 

Meta also struggled to retain teenage users attracted to competitors like TikTok. Nearly one-third of Reels videos were created on another platform, usually TikTok, and include a watermark or border identifying them as such. 

Thus far, Instagram Reels has paid out $120 million to creators from its fund worth $1 billion. However, Meta rebutted the low payout claims. Meta also continues to battle negative perceptions among users.

“Creators still think of TikTok as being synonymous with SFV and prioritize it for the broad discoverability it brings them,” the document added.

Earlier, Needham expressed pessimism about Meta’s efforts to catch up with TikTok, falling brand value, and metaverse ambitions. TikTok President also found it futile for Meta to emulate TikTok.

Price Action: META shares traded lower by 0.59% at $168.15 on the last check Monday.