Meta shared some important insights into Q1 2023 earnings. According to reports, time spent on Instagram grew by more than 24%. That is, since the company launched i Reel on the platform with AI-powered content recommendations. We’re talking about the recommended type of video that TikTok has built its entire brand on.
Time spent on Instagram increased thanks to Reels
“We are very pleased with what we have seen Reels bring so far in terms of incremental engagement on the platform,” he said Susan Li, CFO of Meta. She added that “it’s clear that people value short-form video” on the platform. She also clarified that Instagram is seeing a lot more shares on Reels in recent months. “We are seeing Reel shares take off, which have doubled in the last six months,” she finally said.
Despite this significant growth, it does not mean that there is already more revenue. Li herself has noted that this time spent on Reels leads to decrease in revenue from stories and feeds. However, the broader trend is incremental, which means overall user time is increasing. This, according to Li, will ultimately be a bright spot for earning potential.
He stressed, then, that there will be work on the product to understand the correct monetization regarding the Reels. Since they are “structurally different” from existing Instagram content types.
Instagram Reels vs TikTok concept. Facebook launches a new Instagram feature to compete agaisnt short video app TikTok. United States, August 06, 2020
Destination under investigation in Italy for tax evasion
The Prosecutor of Milan opened a file in February for cui Meta is under investigation for non-payment of VAT from 2015 to 2021, for a total of 870 million euros. The figure was calculated by the economic-financial police unit of the Milan Guardia di Finanza, based on calculations over seven years of (alleged) failure to submit the value added tax return by the Facebook and Instagram company.
It rests on the simple assumption that i user data who subscribe to the company’s platforms have a economic value, since they are profiled and monetized in the form of advertising investments. Logically, VAT should be paid on these earnings, which, however, Mark Zuckerberg’s company has avoided doing.