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The endless scrolls and the battle for short-form video

The endless scrolls and the battle for short-form video

Last week Facebook reassigned its “product experimentation” division to focus exclusively on one thing: short-form video. 

Here’s what you need to know this week:

  • Affairs of state:  The Endless Scrolls and the Battle for Short-form Video

State-by-state:

  • Google could have to pay more fines
  • Apple’s prices are going up
  • Microsoft walked away from a windfall in Apple shares
  • Amazon is making moves in Africa
  • Tencent welcomed a PlayStation executive

Affairs of state: The Endless Scrolls and the Battle for Short-form Video

Last week Facebook reassigned its “product experimentation” division to focus exclusively on one thing: short-form video. 

Why? Short-form video – literally, videos that are short (a few seconds in length) – is crucial to Facebook’s success. Facebook created the “product experimentation” division in 2019 to be a “team of founders and builders who create new products” and “challenge the status quo the hacker way, through high-velocity experiments designed to help people improve their lives”.

Far from challenging the status quo, Facebook is copying a well-established and hugely successful feature pioneered by its chief rival, TikTok. 

What’s happened? As reported by Casey Newton in Platformer last week, Meta’s Chief Product Officer, Chris Cox, directed the team to focus its efforts entirely on innovation in short-form video, as Instagram has continued to lose ground to TikTok. 

Earlier this year Meta’s stock value collapsed in light of dwindling revenues, falling user numbers and the revelation from Mark Zuckerberg that Facebook faced an “unprecedented level of competition” from ByteDance’s TikTok. 

Meta is trying to fight back. 

Why is short-form video important to platforms? Engagement maximisation. Short-form video allows users to quickly create, share and view more content. A user can watch more videos of 21 seconds each (the average video length on TikTok), every day than they could videos 21 minutes long, and therefore can engage with – like, emote, share or subscribe – more. As long as the content is equally engaging, this means seeing more adverts, and may also mean spending more total time on the platform. 

Making short-form videos easier to create, and better predicting which videos users will engage with the most is the name of the game for both Instagram and TikTok (as well as a number of other competitors including YouTube Shorts).

TikTok and short-form video. Instagram’s “Reels” function, introduced in 2020, mimicked TikTok’s core feature, but the Chinese platform has continued to amass huge numbers of users, especially among America’s youth. Meta’s offering is lagging behind. Instagram users spend 17.6 million hours per day watching reels, whereas TikTok users spend 197.8 million hours per day on the app. Much of the content posted to Reels is originally from TikTok, as users download their videos from ByteDance’s platform and repost them to Meta’s.

Instagram has about 1.4 billion users worldwide, TikTok has 1 billion, but is growing much faster, with a third of its users in the 10-19 age range.

Snapchat and disappearing messages. Meta has form in copying competitors’ products. In 2016, Snapchat was outgrowing Instagram, especially among younger users. Snapchat’s main feature – disappearing images and videos – inspired Instagram to release “Stories”. Instagram’s CEO at the time, Kevin Systrom, said “they [Snapchat] deserve all the credit”. Snapchat subsequently suffered an 82 per cent slowdown in growth, and today, 87 per cent of Instagram users create content daily with the “Stories” feature. 

Google Blogger and the endless scroll. Beyond short-form video, one of the widely copied features on social media platforms is the “endless scroll”. Rather than reaching the bottom of a page, new content is continuously served to users as they scroll, while their dwell time and other engagement behaviour are analysed in the background. Invented by Aza Raskin, and quickly adopted by Google and Mozilla, Meta introduced endless scrolling to Instagram in 2020. 

Who’s next? Possibly BeReal. BeReal is a fast-growing social media app founded in late 2019. It invites users to post an image, twice per day, at a pseudo-random time (giving them two minutes to do so before the post gets marked as “late”), and encourages unscripted posts that are more authentic than the constantly curated profiles on Instagram. A spokesperson for BeReal told us “we want an alternative to addictive social networks fueling social comparison and portraying life with the goal of amassing influence.” 

According to a screenshot posted on Twitter by developer Alessandro Paluzzi, Instagram is testing a feature that looks almost identical to BeReal’s. In the image, Instagram asks users to “Join IG Candid Challenges” and “everyday at a different time, get a notification to capture and share a photo in 2 minutes.” 

The spokesperson from BeReal refused to comment directly on Meta copying its product. 

How does Meta get away with it? To put it simply, a technology company can’t patent a concept. The concepts of recommending videos to users, endless scrolling or short-videos aren’t subject to copyright, even if they are original. So long as Instagram doesn’t copy the exact same source code as TikTok, or make the platform look identical, it’s unlikely to face any legal challenges.

In the realm of software, companies are free to copy one another, and Meta’s approach of buying up or copying its competitors has drawn significant scrutiny from competition authorities. 

Why this story? A few weeks ago we wrote about Meta’s possible collapse. If it can’t revive its social media business through competition with TikTok, and continues to suffer as a result of Apple data protection measures, the future is bleak for Zuckerberg’s business. Meta is serious about competing with TikTok for dominance in the short-form video space. It is the main content form with which younger users engage, and a vehicle for a significant proportion of marketing spend in social media.


Google: Verily

Google is facing yet another European antitrust probe. It could cost the company as much as $25 billion. Competition authorities in France found in 2021 that Google had “misused” its advertising technology to benefit its own servers, leading to a €220 fine and enforced changes to the company’s practices. Google now faces two further claims in the Netherlands and UK hot on the heels of a $50 million fine in South Korea for failing to properly inform users about data collection, and only a few years after losing a landmark antitrust case over mobile internet provision, which cost Google €4.3 billion. The cost of being a gatekeeper in the digital world is starting to mount up.


Apple: In-app price hike

Apple is raising its prices in countries around the world. The price of in-app purchases on the Apple App Store will be going up, affecting a number of regions including Japan and Poland as well as all countries that use the Euro. The price of in-app purchases on the App Store has risen steadily, by almost 40 per cent since last year. Charging higher fees on in-app purchases is one way Apple is seeking to boost revenue after falling short of analysts’ expectations in its most recent earnings report. Another is by increasing the number of ads that users see in the App Store and on the “Today” homepage.  


Microsoft: Rescue funds

In 2003, Microsoft sold off Apple stock worth $550 million – today it would have been worth $120 billion. In 1997 Bill Gates and Steve Jobs made an agreement to help save Apple’s failing fortunes. Microsoft would keep making Office software for Apple computers, and would invest $150 million in non-voting Apple shares. Ultimately, Apple soared as a result of its phenomenally successful iMac products, so when Microsoft sold the shares for $500 million it walked away from a massive windfall. Read this excellent story for Inc.


Meta: Hiring race

Meta is being overtaken by Apple in the race to hire advertising and augmented reality engineers. The number of open job listings under augmented-reality (AR) and advertising ads shows that Apple has more vacancies than Meta, with 34 per cent more openings in advertising and 16 per cent more in AR. The study, reported by The Hustle, comes as Meta announces plans to slash its hiring of engineers by 30 per cent this year as a means of bracing for economic headwinds. 


Amazon: Project Fela

Amazon Prime Video has signed its first deal with an African filmmaker. This week, Jáde Osiberu, one of Nigeria’s most successful producers, agreed to a three-year deal under which exclusive rights will pass to the Prime Video streaming platform. Amazon reportedly sees the African continent as a major growth opportunity. It plans to launch its retail platform in Nigeria and South Africa in 2023, while its broader strategy for Africa – codenamed “Project Fela” – includes bringing Amazon Web Services to the planet’s fastest growing digital population, and accelerating the uptake of its video streaming services. 


Tencent: Shawn Layden

The former PlayStation executive Shawn Layden is joining Tencent. Layden said his new role at the Chinese company would “deepen” its activities in the gaming industry. He will serve as a strategic advisor to Tencent Games, which is already the world’s largest gaming division and owns major title League of Legends, as well as significant stakes in Epic Games, Ubisoft and Activision Blizzard. Tencent’s gaming business has struggled so far this year, with a long-standing hiatus on new gaming licences granted by the Chinese government forcing it to wait before bringing new publications to the market.


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Luke Gbedemah
@LukeGbedemah

Sebastian Hervas-Jones