Instagram announces IGTV monetization—what it means to comms pros

by | Jun 9, 2020 | Analysis, Public Relations

Following an announcement last week, Instagram will soon open up a new influencer revenue stream in the form of IGTV advertisements. With many brand deals drying up in the wake of the coronavirus crisis, the move is sure to come as a relief to countless online content creators.

“This has been a trying time, where creators have been there for their fans,” said Instagram chief operating officer Justin Osofsky of the move, “it’s a time of uncertainty with less paid work generally.”

Even so, opening up the monetization of Instagram’s IGTV feature is far from an act of altruism on the part of Instagram and parent Facebook Inc.

As shelter-in-place rules kept people at home, engagement with Instagram rose to an all-time high: views of live videos skyrocketed 70 percent between February and March. With advertising on IGTV, Instagram now has a way to vie for the talent of creators otherwise focusing their efforts on YouTube, while opening yet another revenue stream for itself.

Instagram has been a mainstay of smartphones for close to a decade now, and has long wrestled with the issue of becoming a source of income for its users. With quarantine and stay-at-home orders forcing the global population indoors, however, users increasingly turn to the platform to build their businesses—with or without Instagram’s help.

Thus far, content creators have turned to Instagram to recreate experiences and performances that they might have otherwise hosted in person. Food influencers are hosting home cooking classes, fashion influencers are offering closet tours, music artists are performing live from their living rooms, and artists are teaching followers how to draw. Many are accepting payment via Venmo, or relying on outside platforms like Patreon to draw an income from their fan bases.

Instagram has no doubt kept a close eye on this trend for a while, and now sees an opportunity to get a piece of the pie

First, by adding advertisements to IGTV content, for which creators will receive 55 percent of the money generated. Second, Instagram has created badges through which audiences can pay to support IGTV content, from 99 cents to $4.99, with the badges lasting only for the duration of the video.

“We’re hoping badges will be a tool to support a broad range of uses,” says Osofsky, though he has emphasized that this monetization scheme is still in its trial stages. “We’re definitely in the early days.”

Adding opportunities for creators to earn revenue directly off of their Instagram content is also likely an attempt by the platform to retain creators who might otherwise leave for YouTube and TikTok. YouTube has long offered monetization on creators’ videos, with the same 45-55 percent revenue split, and TikTok’s rapid rise in popularity has opened the door for a new generation of influencers keen to generate money via their fan bases.

While Instagram’s IGTV has struggled to compete with the popularity of TikTok videos, the sharing of ad revenue might be enough to keep creators on the platform. The changes are set to roll out in early June to a select group of creators and advertisers.

Ronn Torossian
Ronn Torossian founded 5WPR, a leading PR agency..


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