When Reels debuted five years ago, it looked like a hurried wall built to slow TikTok’s advance. Few expected it to become one of Meta’s most profitable assets, generating revenue on the scale of global household names, and now preparing to follow viewers from their phones to their televisions.
The numbers came into sharp focus during Meta’s October earnings call. Mark Zuckerberg revealed that Reels, spanning Instagram and Facebook, is now operating at a $50 billion annual revenue run rate, with the company expecting to cross that threshold within a year. That growth places Reels in rare company, nearing YouTube’s projected $46 billion in ad revenue and leaving TikTok’s estimated $17 billion far behind.
“Video is a particular bright spot,” Zuckerberg said, pointing to Meta’s AI-powered recommendation systems as a key driver of “higher-quality and more relevant content.” He added that video watch time on Instagram rose 30% year over year.
Just a few years ago, internal data told a discouraging story: in 2022, users spent only a tenth as much time on Reels as they did on TikTok. The fix wasn’t simply adding a new tab; it meant redefining what the app was meant to be.
“That’s an entirely different ranking challenge,” Tessa Lyons, Instagram’s vice president of product, told The Wall Street Journal. Built as a photo-sharing network for friends, Instagram had to remake itself into an entertainment discovery platform. Its algorithm, once driven by the social graph, was reoriented toward TikTok’s model, prioritizing watch time and inferred interests.
The shift forced Meta to develop more advanced AI systems that could read subtle engagement signals in real time. The company also paid creators to populate the platform with original content, kick-starting a feedback loop that helped refine its recommendation models. As usage climbed, the system grew increasingly accurate, matching videos to individual tastes with little regard for a user’s social connections.
The payoff is now visible in the data. Sensor Tower estimates that the average Instagram user spends 27 minutes a day on Reels, slightly more than YouTube Shorts at 21 minutes, though still well behind TikTok’s main feed at 44 minutes.
Seeing mobile momentum as only the first phase, Meta is pushing into the living room. The company has started testing an “Instagram for TV” app, beginning with a limited rollout on Amazon Fire TV devices in the U.S. The move codifies a trend Lyons’ team had already noticed: users were casting Reels from their phones to televisions on their own.
This directly challenges YouTube, which has long dominated the living room, where viewership now surpasses its mobile traffic.
Meta is continuing to refine how users guide their video feeds. Features such as “Blend,” which merges friends’ recommendation algorithms into a shared feed, along with new feedback controls like “more puppies,” give viewers more direct input into what they see.
Lyons said those personalization features will carry over to the TV version as well. “When you’re on TV, you want to be able to tap into the right kind of content, depending on who you’re sitting with,” she said.
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