How will the newly-launched IGTV fare in an era where web video has gotten over-saturated with adverts? Instagram was reportedly investigating creating ads for YouTube stars with its new live-streaming app as well as the Snapchat Stories-killing IGTV. The biggest fear was that some creators may lose traffic on Instagram as advertisers’ limited channels on the service would make it uneconomical to promote an IGTV channel.
So let’s look at this through a different lens. Because IGTV doesn’t just compete with YouTube for web stars, it could also prove a cheaper spot for advertising. Online video ads are now like TV spots — larded with impressions, bad quality, and break-up-with-the-standard-clip-ready-mess. If IGTV integrates with YouTube’s ad viewability metrics and ensures videos adhered to its shooting policy, it could steal plenty of ad budgets and eyeballs away from YouTube.
“It’s important to note this experiment isn’t about monetizing content on IGTV, but rather enabling the idea of sharing on a second screen with your friends,” an Instagram spokesperson told TechCrunch. That leaves the door open to letting IGTV creators generate some revenue if it proves to be successful.
On first look, it’s just a very early prototype, sharing video from earlier and watching videos uploaded by users with their accounts. It also doesn’t show a full video stream — a serious outlier for the ephemeral format. Still, Facebook could be trying to avoid building adtech infrastructure for multiple platforms at the same time. Perhaps Facebook-owned Instagram would buy a company like Ad.ly, which helps influencers make money off of Instagram using short ads.
Facebook is finally ready to start monetizing its 161 million daily active users. But it’s still adapting its ad tech to mimic YouTube, where advertisers have a huge head start and are paying 85 cents per 1000 ad impressions. Even if Instagram is able to pull off this trick, it could find itself in a world of lawsuits from creators who eventually see their videos blacklisted from the platform. That could frustrate Facebook execs who hate that YouTube’s creators can leverage their fame to build empires and speak to massive numbers of viewers.
So it’s important to have a low bar for IGTV’s monetization. The experiment isn’t about generating revenue now. It’s about showing how seeing videos might replace watching YouTube on smartphones.
If Facebook and Instagram can’t crack that code, how then will they compete with YouTube’s 1.5 billion or even 1 billion unique users and 55 billion hours of video watched per month?