TikTok vs. Instagram Reels vs. YouTube Shorts: Who Will Win the Short-Video Race? | WSJ

TikTok vs. Instagram Reels vs. YouTube Shorts: Who Will Win the Short-Video Race? | WSJ

Google, Meta and ByteDance are in a battle for supremacy in the short-video format. WSJ’s Miles Kruppa breaks down how each company is doing and shares insight into which platform might come out on top.

– [Narrator] Short-form video has become
the latest battleground in social media,
and the three big players?
TikTok, Instagram Reels, and YouTube Shorts.
– In the next few years
it will be billions of dollars being poured
into these platforms,
trying to increase their reach,
trying to increase the value for advertisers.
– [Narrator] So let’s compare them and see
which one is winning over users so far
and which one might come out on top.
TikTok was the first of the three to burst onto the scene,
but before TikTok there was Vine,
a popular short video service offered by Twitter.
(people cheer)
– Vine was one of the first short video platforms
to really grab the attention of young creators.
After Twitter discontinued Vine in 2017,
it created a big gap in the market
that was prime for TikTok to exploit.
– [Narrator] TikTok enjoyed rapid growth
in places like the US and India,
and by February 2019
the app had been downloaded more than a billion times
on Apple iOS and Android
according to app analytics site Sensor Tower.
But in 2020, the narrative started to change.
– America and other countries went into lockdown
because of the coronavirus,
people started spending more time on TikTok,
and all of a sudden it seemed like
the scrutiny on TikTok also increased.
– [Narrator] President Donald Trump voiced concern
over the possibility that user data on TikTok
could be shared with the Chinese government
through the app’s parent company ByteDance.
– We’re looking at TikTok, we may be banning TikTok.
– He launched a lengthy back and forth
with TikTok and its Chinese parent ByteDance
that never really reached resolution during his presidency
but had a really huge destabilizing effect
on the app’s position in the US.
– [Narrator] At the time, TikTok officials said
that user data was held in servers in the US and Singapore
and wouldn’t be shared.
In June 2020, India decided to ban TikTok.
– That’s important because it presented a gap
for rivals like Facebook and Google’s YouTube
to try to offer their own products in the market.
– [Narrator] And sure enough, in late 2020,
Facebook and YouTube launched
their own short video services.
Snapchat also entered the mix with Spotlight
which offers a daily pool of more than one million dollars
to users who create the most entertaining Snaps.
– Instagram and YouTube already had large built-in audiences
and TikTok had primed people to want
this kind of short-form video.
When Instagram and YouTube started rolling out
their own services,
they took off pretty quickly.
– [Narrator] Meta hasn’t said how many monthly users
interact with Reels,
but Instagram passed
two billion monthly active users last year,
and in its April earnings call
Chief Executive Mark Zuckerberg said,
“Reels already makes up more than 20% of the time
“that people spend on Instagram.”
– [Narrator] Google said in June
that more than 1.5 billion people
watch YouTube Shorts every month.
TikTok said in September the app had drawn
more than one billion monthly users.
Third party estimates have shown that number
as high as 1.6 billion monthly users.
The short video craze also inspired Pinterest
to create Watch last year,
where users can scroll through short videos and pictures.
Netflix launched a feature called Fast Laughs
that serves up short clips from Netflix shows.
And even Twitter said in December
that it was testing out an updated Explore tab
to allow users to scroll through short-form video tweets.
So with all these options,
which platform is the most popular among users?
– TikTok certainly seems like is still in the lead.
– [Narrator] If you look at the user data
from digital intelligence company SimilarWeb,
people say they’re spending more time on TikTok
than on the Instagram app or YouTube platform.
– With that being said,
Reels and Shorts are gaining very quickly.
– [Narrator] In a June survey
by data platform company Inmar Intelligence,
44% of people picked TikTok
as their preferred short-form video service,
followed by 29% for YouTube Shorts
and 20% for Instagram Reels.
Another measure of success for these platforms?
Advertising revenue. – TikTok seems to be
the farthest along in turning on advertising on the service.
This year, they’re projected to make about $12 billion
in advertising revenue,
up from $4 billion last year.
– [Narrator] TikTok partners
with e-commerce platforms like Shopify
to help businesses advertise directly
through their Shopify dashboards.
And earlier this year,
in an effort to attract more advertisers,
TikTok enabled first and third party cookies
on top of its existing tools.
– YouTube Shorts only recently started
allowing ads on the service.
Reels is also more immature
turning on ads on the service.
– [Narrator] But they’re quickly catching up.
Their parent companies, Google and Meta,
are two of the largest online advertising companies
in the world.
– It’s a fairly safe assumption
that they’re putting a lot of effort
behind getting digital ads on these services
and making that a bigger part
of their growth story for the future.
– [Narrator] Second place is still a close battle,
but it appears that Shorts is gaining fast on TikTok
based on viewer data Google released in June.
Shorts began rolling out ads globally in May
and Google said it would eventually allow companies
to make their ads shoppable,
like on TikTok and Reels.
– It’s still a little bit early to tell how that is going,
but YouTube right now is looking for a new source of growth
as revenue growth has been flagging,
so they’re putting a lot of work into making Shorts
a big advertisement platform.
– [Narrator] YouTube Shorts also has a unique advantage.
It allows creators to use the analytics tools
on YouTube’s main platform,
which provide data about who is watching videos.
These tools help creators work with brands
and prove the effectiveness of their sponsored content,
but YouTube Shorts doesn’t offer creators
the same special effects options as TikTok.
This spring, it rolled out new features,
including one that lets users
turn snippets of existing YouTube videos into Shorts,
but it’s still missing tools like this,
which lets creators combine their video
with one from another user.
It’s harder to pinpoint where Instagram Reels is
in this race
because Meta has been reluctant to release data
about monthly active users on Reels.
But in its July earnings call,
Chief Executive Mark Zuckerberg said the company saw
“a more than 30% increase
“in the time that people spend engaging with Reels
“across Facebook and Instagram.”
– [Narrator] However, this is the first time
that Meta has ever reported a decline in revenue,
down almost 1% from the previous year.
Earlier this month, Meta said it is reallocating resources
from its Facebook News tab and newsletter platform Bulletin
as part of a broader shift
toward short-form video content creators
that can compete with TikTok.
The company also said Facebook’s Home feed
will be more personalized,
featuring Reels and content driven
by the platform’s algorithm.
As the race continues,
TikTok remains a concern for some US lawmakers
and users concerned about data privacy,
but the company has taken steps to address this.
In June, the company said that 100% of US user traffic
was being routed to its partner Oracle,
and TikTok said that while it still uses
its own US and Singapore data centers as backup,
it expects to delete US user data from its own data centers
and migrate fully to Oracle servers.
But for now, TikTok’s algorithm still seems to attract
more users among the short video platforms,
and that might help it remain the front runner in this race.

 

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