Facebook is going all-out in promoting its new short-video streaming platform Instagram Reels by offering to pay content creators cold, hard cash to create new accounts. The platform is similar to ByteDance's TikTok app and is Facebook's latest attempt to taking over the highly popular short-video app segment.
According to a report published by The Wall Street Journal on Tuesday, Facebook, through Instagram, will be offering hundreds of thousands of dollars to eligible high-profile TikTok content creators to convince them to use its new app. The report did not specify how much exactly the content creators will be paid to create accounts on Instagram Reels or which content creators were contacted by the company.
The offering of cash incentives to lure content creators away from TikTok has been described as a direct escalation in the competition between Facebook and ByteDance to take over the highly lucrative app segment. Earlier in the week, TikTok had announced that it will be establishing a $200 million fund aimed at proving a new source of monetization for existing and new users on its platform.
TikTok did not immediately disclose the exact process of its new monetization strategy but it did reveal that the amount allocated for content creators is only the first phase of its much wider strategy. The $200 million it had allocated will be distributed through a yet-to-be-announced monetization program, which will allow content creators to earn money from their short videos. Before, TikTok content creators were only able to monetize their videos through brand partnerships and sponsorships.
Instagram Reels functions very similarly to TikTok, with the one key difference being that Reels' short videos will be limited to only 15 seconds. TikTok users on the other hand can upload videos up to 60 seconds in length.
Since becoming mainstream in the United States and other parts of the world, TikTok has become a major threat to Instagram's dominance in the social media space. In April, TikTok surpassed Instagram as it hit two billion global downloads.
In recent weeks, TikTok has been facing added scrutiny in the U.S., threatening its ability to continue its operations in the country. U.S. lawmakers and some politicians have accused the ByteDance-owned company of being a national security threat.
TikTok has denied the accusations, explaining that it is operating independently from its parent company. TikTok has moved to distance itself from its Chinese owner, even going as far as hiring an American CEO. A group of U.S. investors has reportedly expressed interest in buying out the company in an attempt to resolve the issue.