Instagram Experimenting With New Revenue Share Models for Livestreams

Instagram revenue share
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Instagram revenue share
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Photo Credit: Instagram

Instagram is experimenting with new revenue share tools for video creators.

These new tools include badges that viewers can purchase, similar to Twitch bits. Instagram is also introducing IGTV ads that split the revenue with creators. Both features are currently in the testing phase and are not available to everyone.

Instagram will offer different heart badges at the start. One heart badge is $0.99, $1.99 for two hearts, or $4.99 for three hearts. Viewers may only buy one badge pack per video to support the creator. Badges appear next to the purchaser’s name throughout the live video. It highlights supporters for creators, making it easier to give them a shout-out or answer questions.

Instagram’s new revenue share badges are nothing new – Facebook Live, YouTube, and Twitch all have tipping.

But this move is a first for Instagram’s live video platform, which has seen exponential growth during the COVID-19 pandemic. Instagram says its live creators saw a 70% increase in video views during February and March.

Alongside the new badges, Instagram will also introduce advertising on IGTV. IGTV ads appear when people click to watch the videos. The ads are tailored to mobile viewing and are only 15 seconds in length. Instagram says ads on IGTV are also a test of ad placement and effectiveness. The company says it doesn’t want to annoy users, which could hurt creator video views.

Instagram is testing the ability to skip ads with a small number of users., too. Currently, IGTV ads are only available to a handful of creators and advertisers. Some advertisers onboard include Sephora and Puma. Instagram says 55% of the advertising revenue generated will go to the creator. That’s similar to YouTube’s share of its ad revenue.

Alphabet CFO Ruth Porat revealed to investors in February 2020 that YouTube makes $15 billion from advertising alone. Around $8.5 billion of that is paid out to content creators – what YouTube calls “content acquisition.”