• by Karlene Lukovitz  @KLmarketdaily, February 3, 2023

YouTube Shorts and Meta’s Reels are both making headway in the intensely competitive video shorts sector.  

During Alphabet’s Q4 earnings call on Thursday, CEO Sundar Pichai reported that YouTube Shorts has surpassed 50 billion daily views. That’s up from the 30 billion reported in Q1 2022.

However, it still falls far short of Meta’s Reels, which attracted 140 billion daily views across Facebook and Instagram in Q3 2022, the company reported in October. While Meta did not provide a specific number update during its Q4 2022 call on Wednesday, CEO Mark Zuckerberg reported that Reels plays “more than doubled over the last year” over the two social platforms.

TikTok, meanwhile, has been growing by leaps and bounds according to various industry estimates, but has not divulged numbers since September 2021, when it said it had surpassed 1 billion monthly users.

Both Alphabet/Google and Meta acknowledged that increased engagement has to be translated into monetization.

Google did not break out YouTube Shorts’ contribution to its $7.96 billion in Q4 2022 revenue. But Philipp Schindler, Google’s chief business officer, said that the company is “pleased with [its] continuing progress in early monetization,” and CFO Ruth Porat said that YouTube is “prioritizing continued growth in Shorts engagement and monetization.”

YouTube, which already lets creators take a direct cut of advertising on regular videos, activated its new ad revenue sharing program for Shorts creators on February 1.

This is designed to give Shorts an edge over other platforms. Instagram and TikTok both have creator funds that allocate pools of money based on views and other metrics, rather than the more lucrative direct-cut method preferred by creators.  

Google’s Schindler said the goal is to make YouTube “the best place for shorts and creators,” and boasted that YouTube is the only platform that allows creators to produce all forms of content across multiple formats and screens, as well as offer creators “multiple ways to make a living.” 

In November, Google also adapted its Shorts app to enable viewing the videos on smart TVs. (TikTok began testing a horizontal full-screen mode in December.)  

Meta — which specifically cited monetization of Instagram reels, along with development of its algorithmic recommendation engine, as prime focuses for 2023 — has resisted direct sharing of ad revenue, but is now considering it, according to a report by The Information. 

Currently, Reels contributes to engagement for Meta’s overall family of apps, but cannibalizes time with the Feed to some degree, resulting in an actual loss of money, Zuckerberg revealed during this week’s earnings call. However, Meta expects Reels to have a more or less neutral financial impact as of late 2023 or early 2024, then achieve profitable growth, he said.