Instagram CEO: We've Spent Millions to Woo Creators Amid TikTok Threat
Instagram CEO Adam Mosseri testified this week in a federal court in Washington, D.C., as part of the Federal Trade Commission (FTC)’s antitrust lawsuit against Meta. Since taking over Instagram in 2018, Mosseri has been central in Meta's efforts to attract and retain content creators, recognizing their importance and the shift of power from institutions to individuals in the digital age. This approach is crucial as Instagram competes against platforms like YouTube and TikTok, which have established strong footholds in the creator economy. Under Mosseri's leadership, Instagram has increasingly focused on creators as a core strategy. From 2020 onwards, the company introduced various monetization programs, some of which were later canceled. One notable initiative is the "Bonuses" program, which rewards creators for posting Reels and photos. Earlier this year, Meta offered monthly payments ranging from $2,500 to $50,000 to select creators, highlighting the platform’s willingness to invest heavily in attracting high-quality content producers. However, these efforts have faced resistance. Some creators express dissatisfaction with Instagram’s algorithms and monetization methods, finding them less appealing than those of its competitors. The frequent introduction of new programs has also led to confusion, as creators struggle to predict which tools and features will receive long-term support. To bolster user experience and content distribution, Instagram has made significant investments in physical infrastructure, including server improvements, video processing technology, and data analytics. Mosseri detailed the intense competition Instagram faces from TikTok, which has emerged as the most formidable rival. Internal documents reveal that in 2019, TikTok reduced Instagram’s user engagement time by 23% in the U.S. alone. In response, Instagram launched its own short-form video feature, Reels, in 2020. Initially, Reels was built on Stories and failed, leading to its discontinuation after nearly a year. Another failed attempt was IGTV, designed to compete with TikTok but ultimately unsuccessful. However, repositioning Reels as a standalone feature on the app’s main interface has shown promise, particularly during the pandemic and in recent years. TikTok's growing influence prompted Instagram to refocus on new and emerging creators, a demographic where TikTok excels. Mosseri stated that Meta has invested "hundreds of millions, possibly billions" in the creator ecosystem, encompassing everything from incentive payments to AI-driven recommendation systems. Despite these efforts, TikTok remains a formidable opponent, with Mosseri acknowledging that it has successfully cultivated a sense of community and participation among its users. Additionally, Mosseri discussed the initial tension between Instagram and Meta, particularly regarding the founders, Kevin Systrom and Mike Krieger, who left the company in 2018 due to disagreements over strategic changes. According to Mosseri, these changes, driven by Mark Zuckerberg, often aligned with Facebook’s overall interests rather than Instagram’s specific needs. In one email from 2018, Mosseri expressed concerns about insufficient resources being allocated to Instagram’s Well-being team, responsible for user safety. At the time, Instagram had only 40 engineers dedicated to content safety, compared to 900 for Facebook. The FTC's lawsuit accuses Meta of illegally monopolizing the personal social networking market through its acquisitions of Instagram and WhatsApp. If the FTC prevails, Meta could be forced to divest these platforms. Mosseri emphasized that while entertainment content is expanding on Instagram, maintaining social interactions with friends remains the app’s primary focus. He believes that Instagram must balance growth with preserving its unique identity. In 2018, Zuckerberg himself noted the importance of retaining Instagram’s social nature, stating that overemphasizing public figures could erode its core appeal. Mosseri reiterated this point, explaining that the balance between social and entertainment content is essential for Instagram’s success. Reflecting on past decisions, Mosseri described Meta’s acquisition of Instagram as one of the best business moves ever. Instagram gained access to Facebook’s vast technological and financial resources, while Meta benefited from Instagram’s innovative product development skills. Both parties, he said, “reaped immense benefits.” The ongoing struggle between Instagram and TikTok exemplifies the broader shift in the tech industry towards individual creators and decentralized content creation. Meta, as one of the largest social media companies globally, continues to adapt and innovate to maintain its edge. Its strategic decisions and competitive responses are closely watched by industry insiders, who see this battle as a pivotal moment in the evolution of social platforms. The company’s ability to flexibly adjust its strategies in response to rapid market changes underscores its resilience and potential to shape the future of the creator economy. Meta’s extensive resources and technological capabilities give it a robust foundation to continue investing in and improving Instagram, making it a formidable player in the highly competitive digital landscape.
