How Meta's Reels became a hit, with a $50B+ annual run rate; Sensor Tower: users spend 27 minutes/day on Instagram Reels, 21 on YouTube Shorts, and 44 on TikTok
Once a TikTok wannabe, Instagram's video feature is now a hit with users and advertisers. Can it make the leap to television? X: @meghanbobrowsky . LinkedIn: Meghan Bobrowsky X: Meghan Bobrowsky / @meghanbobrowsky : Happy new year! For my first story in 2026, I looked at how Meta's Reels grew to a $50 billion run rate in 2025. 2020: Meta launches Reels 2022: Users spend 10x more time on TikTok 2023-25: IG promotes OG content/pays creators to post, algorithm gets a lot better 2026: Now TV [image] LinkedIn: Meghan Bobrowsky : Happy new year. For my first story of the year, I looked back at how Meta's TikTok copycat product, Reels, became a $50 billion business. …
Context & Ripple Effects
Reels began as Meta's response to TikTok, but early internal data showed a wide engagement gap. Meta later attributed Instagram time-spent growth to AI-driven recommendations, while its creator and original-content push helped turn the format into a major business line.
The reported $50 billion annual run rate puts that turnaround in sharper commercial terms. It also aligns with subsequent Sensor Tower data that Reels became more than half of Instagram's ad inventory in 2025, making short video central to Instagram rather than a separate feature.
First-order effects
- Meta has a large, established revenue stream tied to Reels, while Instagram users now devote 27 minutes a day to the format, according to Sensor Tower.
- Advertisers and creators face an Instagram where Reels is a primary distribution and monetization surface, not merely an experimental TikTok alternative.
Second-order effects
- TikTok and YouTube Shorts must compete not only for viewing time—TikTok still leads at 44 minutes daily versus Shorts' 21—but for creators and advertiser budgets that Meta can now monetize at scale.
- As Reels takes a larger share of Instagram advertising, campaign planning and creative production are likely to shift further toward vertical short-form video; the earlier gap with TikTok in viewing time is no longer the only relevant benchmark.
Third-order effects
- If this pattern persists, social-video competition will increasingly turn on recommendation quality and ad-market conversion, rather than on whether a platform originated the short-video format.
- A potential move toward television would test whether the same short-form recommendation and advertising model can extend beyond mobile feeds; the available coverage does not establish that outcome.
The trend: Short-form video is becoming the core monetization and engagement layer of large social platforms, driven by recommendation systems and creator supply.