This isn’t the first time big social media players have been forced to pivot. And on YouTube Shorts? Ads are “seemingly nonexistent,” MoffettNathanson wrote, as YouTube appears “to be just testing advertising solutions at the moment.” TikTok videos come with a third of the number of ads as Instagram Stories. YouTube’s recent decision to prominently place Shorts right next to the Home button on its app is part of the reason why analysts are expecting the short-form hit to come for Alphabet this quarter.Ĭompared to Instagram Stories, Facebook Reels serve just one-tenth the number of ads.
Meta and Alphabet executives both warned in recent earnings reports that going short will cost their companies.
TikTok’s popularity shows that users love short-form videos if YouTube can’t offer them, it risks losing its dominant position in the social video space. YouTube and Meta are now forced to think as much about viewership as they are about penetration. “With an average view likely lasting only a few seconds, we estimate that this viewership accounts for only a small fraction of the over 1 billion hours consumed on YouTube daily,” the report reads. Still: YouTube might have better penetration compared to Instagram, but MoffettNathanson believes Instagram users spend more time on the app’s short-form videos. Snap Spotlight reaches an estimated 30 percent of its 612 million monthly active users and Instagram Reels access 43 percent of the app’s 154.9 million U.S. With MoffettNathanson estimating YouTube total monthly active users at 2.9 billion, Shorts has an impressive 50 percent penetration - giving YouTube the lead over its competitors’ TikTok copycats. (TikTok hasn’t updated its user count since the fall, but recent third-party estimates place it as high as 1.6 billion.) While YouTube is experiencing a real “Skip Ads” moment, analysts were pleasantly surprised on Wednesday when the platform reported that more than 1.5 billion people watch Shorts every month. (You know, kind of like TikTok.) Instagram Reels and Facebook’s short-form video features are similar. Released worldwide last July, Shorts differ from normal YouTube content in that videos are limited to 60 seconds, presented vertically, and play for users in an endlessly scrolling format.
The Best International Series on Netflix to Watch Right Now 'The Lord of the Rings': Everything You Need to Know About Amazon's Big Money Adaptation The 7 Best Microphones for YouTube Videos and Live Streaming Here's Where You Can Pre-Order Google Pixel 6 Phones Before They Sell Out As short-form becomes the form for social video, what was once the only cell-phone game in town also faces stiff competition from Meta’s Instagram and Facebook, both of which boast a solid track record of successfully monetizing new features. However, as usage trends toward its harder-to-monetize Shorts feature, MoffettNathanson now forecasts YouTube’s overall ad revenue to grow just 5 percent. The researchers previously expected YouTube’s ad revenue to grow 9 percent this quarter to $7.49 billion. MoffettNathanson now expects YouTube will miss out on $275 million in previously estimated ad revenue this quarter. A new report from the media analysts at MoffettNathanson shows that briefer videos cannibalize viewership (and creation) of longer ones, which means sacrificing commercials. With more than one billion monthly active users, TikTok’s explosion in popularity over the last two years forced other social media players to play catch-up, but that pivot is costing YouTube a quarter-billion dollars.