Facebook, Instagram To Pay Content Creators $1B Through 2022 Amid Rising Competition From TikTok, YouTube

Facebook Inc FB said on Wednesday it will spend $1 billion on social media creators by the end of 2022.

What Happened: The investments will include funds to produce content besides payouts and awards for creators who pass a certain milestone and will also be applicable for users on Instagram. 

Facebook will launch The Reels Summer bonus on Instagram, a program that will pay creators for creating great Reels content on the photo-based app. 

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Why It Matters: The Menlo Park, California-based giant is facing intense competition, especially from the China-based TikTok, the first non-Facebook social media app to have surpassed the 3 billion downloads milestone globally, as per SensorTower.

Facebook, which also owns WhatsApp, had earlier this year in an earnings call told investors Apple Inc AAPL is turning out to be one of the biggest competitors. 

Besides TikTok, Alphabet Inc-owned GOOGL GOOG YouTube and Apple, Facebook is seeing intense competition from Snap Inc SNAP-owned Snap, Twitter Inc TWTR, Microsoft Corp MSFT-owned LinkedIn and now audio-based startup Clubhouse. 
Earlier this month, Instagram’s Adam Mosseri had in a Twitter post said it is trying out a host of new features, suggesting that the big changes were in response to TikTok’s burgeoning popularity and YouTube’s spread'

Price Action: Facebook shares closed 1.27% lower at $347.63 on Wednesday.

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