Brief:
- Instagram is offering TikTok creators up to hundreds of thousands of dollars to join its rival service, Instagram Reels, which is set to launch next month in the U.S. following tests in several other countries, The Wall Street Journal reported, citing people familiar with the discussions.
- As it looks to kick off Reels with a bang, Instagram is offering the highest payments to creators who will agree to post exclusively on the service that emulates several key TikTok features, a creator in discussions with the app told the Journal. Instagram is asking creators who won't commit to exclusivity to post to Reels before sharing content on other apps as part of a first-look agreement.
- The Journal's report indicates that Instagram is also willing to cover the costs of producing videos for Reels. Such incentive packages follow TikTok's announcement last week that it was establishing a $200 million fund to supplement the income of up-and-coming creators on its platform.
Insight:
Instagram and parent company Facebook are ramping up aggression against TikTok as the ByteDance-owned social video app continues a meteoric ascent, but also faces an imperiled future in the U.S.
The Trump administration has in recent weeks nodded to outright banning the app, and several private companies and political organizations, including Wells Fargo and, more recently, the Joe Biden campaign, have pressed employees to delete TikTok over security concerns stemming from its owner's roots in China. ByteDance faces several potential paths to protecting TikTok's future in the states, as reported in Bloomberg, including selling a majority stake to U.S. businesses. But a larger competitive swipe by Facebook now could further weaken the app, particularly if it loses top creators who stand among its biggest draws for users.
Instagram's reported strategy of luring top TikTok talent with promises of large paydays and coverage of production costs speaks to the massive amount of influence creators wield in the social media landscape. Some anonymous TikTok creators, including one with millions of followers, are considering joining Reels after the outreach, the Journal said. Whether drawing big names will make or break the app is unclear, but it could make Reels more immediately appealing to advertisers.
Several recent brand campaigns have centered on TikTok creators to win over often elusive teen consumers. Hollister's back-to-school campaign, for example, features Charli D'Amelio, who has over 71 million followers, making her the most popular TikTok creator. American Eagle, another Gen Z-focused apparel brand, is running an effort that stars Addison Rae, the app's second most popular creator. The ads are shot in the style of a TikTok video.
Reels potentially netting other popular creators for its launch could help the service stand out more than Facebook's past attempts at copying TikTok, such as the failed Lasso app that shut down earlier this month. As noted in the Journal, Reels could prove stickier with users in being tied to the recognizable Instagram brand name versus acting as a standalone product. Instagram has successfully copied rivals' features before, namely through the introduction of Stories, a disappearing photo- and video-collage format popularized by Snapchat.
At the same time, TikTok faces other competitive threats, including from Snapchat, another app that's favored by younger cohorts. Snapchat recently began experimenting with a vertical swipe functionality that closely mirrors one available on TikTok. Google's YouTube has similarly sped up testing of a tool that lets mobile users record and share short videos, emulating one of TikTok's key features.
