Meta has reported a 24% increase in time spent on Instagram since the launch of Reels, thanks to its AI-powered content recommendations. The feature allows users to share short-term video content and has been a significant driver of engagement on the platform.

Susan Li, the CFO of Meta, stated that “it’s clear that people value short-term video” on the platform and that the sharing of Reels has doubled in the past six months. However, the feature has not yet directly translated into more revenue for the company, and Li acknowledged that Reels are cannibalizing some revenue from Stories and feed-based posts. Despite this, the overall user time is increasing, which will eventually lead to positive revenue potential.

Reels are expected to be revenue-neutral by the end of the year or early 2024 and will eventually become a key contributor to monetization, although the company needs to figure out the proper monetization strategy since they are “structurally different” from existing Instagram content types.

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