If Facebook is an entertainment ecosystem, its future is video. And it seems that is the case. Instagram is moving rapidly to position itself as an entertainment ecosystem which shows you content irrespective of your connection or relationship with the creator. Partly due to video, the social media giant reported $29 billion in revenue for Q2 2021, more than a 50% increase over the previous year.
Apple, Alphabet, and Microsoft had yet another blow-out quarter, as expected. Google parent company Alphabet managed to more than double its net income year over year, thanks primarily to YouTube’s online advertising sales. Apple TV and Apple Music helped lift the iPhone giant to 93% higher quarterly profits, though CFO Luca Maestri dashed hopes for that high level of growth to continue next quarter. And while Microsoft took a hit in its Xbox gaming subscription business, its profits still climbed 47% from the same period of 2020. All told, Apple, Alphabet, and Microsoft posted combined quarterly profits of $57 billion. (Fortune newsletter)
All these changes are coming because these companies are looking at the number of hours spent per user. Interestingly, video is a better way to entertain that text. The implication is this: Facebook will juice videos and more of them as it continues to work to hold its own space.
YouTube numbers have already validated that videos deliver great results. Facebook is evolving to Facevideo to be part of that evolution.
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Facebook users are spending a lot more time watching video, and short-form video like Instagram Reels is growing fast. Speaking during the company’s second-quarter earnings call, CEO Mark Zuckerberg said that “video now accounts for almost half of all time spent on Facebook.” And on Instagram, TikTok competitor Reels is the “largest contributor to engagement growth.”
Though he stopped short of sharing more specific stats, the new details suggest Instagram’s Reels may be gaining more traction as the company vies for creator talent. Zuckerberg also noted that the company’s focus on creators and shopping would also help it reach its longer term goal of becoming a “metaverse company.”
The destination is “building something brilliantly new and different from the internet as we know it” through the creation of a metaverse: “As part of Facebook’s next chapter, we’re setting up a new Metaverse Product Group. Each of our major initiatives – community, creators, commerce, the next computing platform, etc – will unlock many new experiences by themselves. But together, they’re all part of a much larger goal: helping to bring the metaverse to life. I believe the metaverse will be the successor to the mobile internet, and creating this product group is the next step in our journey to help build it,” he said.”
Zuckerberg said, the metaverse will bring enormous opportunity to individual creators and artists; to individuals who want to work and own homes far from today’s urban centers; and to people who live in places where opportunities for education or recreation are more limited. A realized metaverse could be the next best thing to a working teleportation device, he says. With the company’s Oculus division, which produces the Quest headset, Facebook is trying to develop one.
Video is emerging as the channel of the future. Very soon, more adverts will move through video.
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