Mark Zuckerberg Is Blowing Up Instagram to Try and Catch TikTok

Then, at the very end of the conversation, Sharp got the real pitch. The employee said she’d be most successful if everything she posted was original to Instagram. Suddenly the purpose of the outreach became clear. “Oh, you don’t want me to post TikToks,” she realized. They wanted her to post Reels.

Reels are a kind of short-form video that influencers like Sharp see as a lesser copycat of TikTok’s namesake posts. Instagram owner Facebook (which rebranded in the fall as Meta Platforms Inc.) needs talented users to start posting entertaining Reels to draw young people to the app, and to Facebook by extension. The main social network’s user numbers have flatlined, sending investors running and contributing to a 47% drop in the company’s share price since the start of the year. Chief Executive Officer Mark Zuckerberg’s strategy to reverse the trend—and shore up investor support for his long-term bets on virtual reality—is centered almost entirely on copying TikTok.

Over 14 years, since the invention of its news feed, Facebook has become extremely good at one thing: showing people what they definitely want to see, based on their past behavior and online activity. Facebook ranks your friends based on how much you engage with them and orders their posts accordingly. If you search for cake decorating videos on Instagram, expect to see more in your suggested follows the next time you log on. If you shop online for ankle boots, they’ll turn up in your feed. The upside of that kind of algorithm is a $116 billion advertising business. The downside is, people get bored.

TikTok delivers a level of algorithmic magic that’s a step beyond, introducing people to stuff they had no idea they would be entertained by—which has the effect of boosting no-name stars into the spotlight as long as they’re creating great content. Achieving that same effect has become a top priority, Zuckerberg said during a recent earnings call: “I think about the AI that we’re building not just as a recommendation system for short-form video, but as a discovery engine that can show you all of the most interesting content that people have shared across our systems.”

A company as big as Meta, with 3.6 billion users across Instagram, Facebook, and WhatsApp, has lots of ways to push features on people. Reels now appear in every Instagram user’s feed. Once someone clicks on a Reel, they’re suddenly in a full-screen mode where swiping up or down only gets you to more Reels. This design tweak can be jarring, like turning a corner in a quiet art gallery and finding yourself in the middle of a dance party.

Instagram is planning to take it further, testing a redesign that starts users in full-screen, TikTok-style video mode when they open the app. For Facebook’s lifeline to the youth demographic, this is a major departure. Instagram became a generation’s go-to social app on the strength of its filtered, aspirational lifestyle photography. Now the company is actively killing that identity in the name of beating TikTok, and it might not even work.

TikTok, owned by China’s ByteDance Ltd., is the most-downloaded app in the world. Starting in 2020, Americans spent more time on TikTok than they did on Facebook or Instagram. This year, the app is expected to overtake YouTube. TikTok, which declined to comment on its competition with Reels, instead sent details on its own creator payment program.

Instagram executives recognize that TikTok is more than its video format. They also want to copy the creator culture and, among other things, make it easier for video makers to get paid. “One of the big things that we did for Reels was our bonus incentive program,” says Asad Awan, who’s in charge of monetizing the feature. “You get invited to this program, and as you create your Reels and more people watch it, you get incentives.”

Sharp, who never heard any follow-up from the Instagram employee who called her, at least joined that program. For 700,000 views on her Reels in a recent month, she made $150. She’s been using it to buy drinks at Starbucks for her best friend, who gives a thumbs-up or thumbs-down on her TikToks before she posts them. Posts that pass this test usually wind up on Reels, too, just without the TikTok watermark so that Instagram’s algorithm will count it as original content.

Like many of her peers, Sharp, who started posting short videos during the pandemic, considers herself a TikTok influencer now. “I make more money on TikTok, I have a bigger audience on TikTok, and as a creator I like TikTok better, even though I’ve been on Instagram since I was 13,” she says. She feels little loyalty to Instagram, and even less to Reels. “It’s such a transparent land grab for TikTok,” she says, “without doing any of the work to make their version better.”

Tech giants agree that 15-second videos are the future of entertainment. YouTube has its own copycat, called Shorts, and Snapchat has Spotlight, competing for talented content creators with their own bonus programs. There’s a version of Reels on the original Facebook app, too. “Everyone’s attention spans are shortening,” says Katie Feeney, a 19-year-old Penn State student experimenting with all of the services. “It’s what people like.” In her view, the era of the three-minute video—or television, for that matter—is over.

The supershort format first gained cultural weight with Vine, an app Twitter Inc. acquired a decade ago, the same year Facebook outbid it for Instagram. A generation of internet stars, especially comedians, got noticed through Vine. Eventually they also banded together to demand the company find a way to compensate them, according to three people familiar with the matter, who spoke on condition of anonymity because the negotiations were private. Twitter essentially told them to take a hike, so they did, to venues where they could make money more easily. In 2016, Twitter shut down Vine, unwilling to continue investing in it.

Later that year, Instagram co-founder Kevin Systrom suggested to the bosses at Facebook that they buy a similar app called Musical.ly, according to a person familiar with the matter, who spoke on condition of anonymity for fear of retaliation. Facebook passed, this person says, thinking that it would be tough to get an acquisition of a China-based company past regulators. Plus, Facebook executives didn’t trust the age verification. The person familiar says Facebook’s research showed Musical.ly was clearly most popular with preteens, and given its history of privacy scandals, Facebook didn’t want to run afoul of US child data laws.

ByteDance bought the app instead and renamed it TikTok. The preteens grew up and became cultural trendsetters. Feeney, who started out posting short videos as a Maryland middle schooler, now has 6.8 million followers on TikTok and works on social media for her hometown NFL team, the Washington Commanders. She uses her personal account to reflect, face to camera, about life as a college student.

ByteDance spent heavily on advertising TikTok via Facebook, Instagram, and Snapchat. During the pandemic, the app took off. Researchers expected TikTok’s growth would fade along with Covid-19 lockdowns, but the opposite happened. Instead, it’s Facebook that’s having trouble growing. And Instagram, the company’s center of cool and culture, isn’t starting the trends anymore.

Instagram employees say they think Reels has a chance of becoming a cultural touchstone, in part because they’ve succeeded in the just-copy-the-new-kid strategy before. When Snapchat became popular among teens with its unfiltered, disappearing posts, Instagram researchers realized they were losing out on growth because people were too anxious about presenting themselves perfectly. In 2016 they copied Snapchat’s “stories” format, for posts that disappear within 24 hours. While the effort didn’t kill Snapchat, it did mean older Instagram users wouldn’t have to figure out how to use the newer app, imposing something of a ceiling on Snapchat’s broader cultural relevance. And it made Instagram more interesting to the masses, putting it on a path to 1 billion users.

The same could happen with short-form video. “There’s a market for people who would enjoy that format but might never be a key audience for TikTok,” says Liz Perle, who ran teen community at Instagram and now consults for various tech companies.

But Zuckerberg’s lieutenants could fill a graveyard with once-important projects. Reels could just as easily end up like IGTV, the app’s YouTube competitor that was launched with fanfare in 2018 and quickly became an afterthought for creators and users. Or Facebook Gaming, another 2018 invention that’s never managed to meaningfully compete with Amazon.com Inc.’s Twitch. Facebook Gaming started out with exciting partnerships but is now overrun with bots and strange e-commerce scam videos from Southeast Asia.

Some creators will play along with Meta’s latest priority as long as it keeps delivering an audience and money. Feeney says she’s always “struggled to grow on Instagram. Of all the platforms, it was the hardest to grow on. Every creator will agree on that.” Recently she redoubled her efforts. She started posting several times a day to Reels, and Instagram’s algorithm rewarded the effort. In contrast to her millions of TikTok followers, she had about 500,000 on Instagram six months ago, then added an additional 400,000 by focusing on short-form video. “I attribute all my growth to it,” she says.

There’s still plenty of money to be made on Instagram, whether or not Reels succeeds. “While I think we are seeing Instagram fall from its spot as the most beloved social platform by most Americans, that doesn’t mean it will fail or close,” says Karyn Spencer, who ran creator relationships at Vine. “It just means that you can only be prom queen for so many years before someone younger and fresher comes to take your crown.”

TikTok’s algorithm is specifically tuned to avoid showing anyone the same video twice and to serve up a wide range of material, including from somewhat random sources, to keep things interesting for those who scroll. This has the side effect of making it possible for anyone, not just people with an existing following, to achieve a real measure of internet fame in a hurry.

One night in late April 2020, 34-year-old Chris Equale was having a White Claw on the balcony with his fiancée when his phone started vibrating and wouldn’t stop. That day, bored by pandemic lockdown in his Las Vegas home, he’d experimented with the mobile editing tools on TikTok to turn his two corgis, Hammy and Olivia, into lovable talking characters. He posted the resulting video on both Instagram and TikTok, but all the buzz that night was coming from TikTok—250,000 views in 20 minutes.

He showed his phone to his fiancée and said, “Look, we’re not the only ones struggling to find joy right now.” He committed to posting a new talking-corgis video online each day.

At the time, “I had no idea what TikTok was or what it could do,” he says. Now he tells people “you can post something, and it can be seen by millions of eyeballs even if you have a following of zero. It’s the best platform to be discovered.”

Instagram is testing its ability to achieve a similar effect by developing a sort of behind-the-scenes talent show. “To figure out what content should get broad distribution, we give a piece of content a little bit of distribution to see if it resonates with an audience,” says Tessa Lyons, a product director at Instagram. Say it’s a corgi video; the test audience doesn’t have to have any known affinity for dogs, breaking prior rules. “You can imagine someone goes and tries out, and if they do well in Round 1 they go on to Round 2,” getting exposed to a higher percentage of Instagrammers each time.

Ideally, Instagram mints stars that way, Lyons says. The team is especially interested in smaller-scale influencers. Instagram already has plenty of accounts with tens of millions of followers, and the top ranks don’t change often. What Instagram needs is to prove to everyday video makers that it’s still a place they can become famous and start a career, not just ride one out until the next platform comes along. In the meantime, TikTok is starting to copy rivals’ features, too. It’s incorporating disappearing stories, livestreaming, and videos as long as 10 minutes.

Reels is a defensive move, but Zuckerberg has also been playing offense. He’s spent years mentioning TikTok’s Chinese ownership and implying that the platform might threaten users’ rights to privacy and free speech. That’s an awkward argument to make if you run Facebook. This year the reported that Meta has been paying the Republican consulting firm Targeted Victory to malign TikTok through op-eds and letters sent to newspapers around the country, calling TikTok a threat to young people’s well-being. That’s a terrible argument to make if you run Instagram.

But Zuckerberg might not have time for nuance. About a year ago his company had a market of about $1 trillion. Today it’s worth about half that. In February, after Meta reported fourth-quarter earnings, its fell a record $251 billion in a day. The company is now cutting spending on its longer-term bets, such as virtual reality hardware and the metaverse, while it waits for Reels to win over advertisers. And advertisers may not be in the mood for experiments, given cutbacks due to supply chain pressures, inflation, and the war in Ukraine.

Creators are doing their best to follow the money. Sharp, who’s been posting about the joys and frustrations of wedding planning, says that with the algorithmic shift to Reels, she has little choice but to make more short-form videos. Instagram has become crowded with features meant to attract young people, and only Reels seems to be getting the attention from the algorithm, as far as Sharp can tell. “My followers are not seeing my in-feed content and are not seeing my stories,” she says.

The advice from Instagram when she brought it up: Just keep posting.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.