Facebook launched Video on Instagram, which will offer functionality comparable to Vine (a similar service owned by Twitter) and other video social networks. The video service enables users to post 15-second videos on Instagram and have 13 custom filter choices to edit the video. Video on Instagram is available on iOS and Android apps today, and can be viewed on the Web. This video feature as a core social feature that should drive higher engagement on the Instagram platform.
With 130mn monthly active users and a billion Likes daily (Facebook has said Instragram is growing faster than FB at the same stage), Instagram has an active platform to expand into videos Video on Instagram should help drive activity although we continue to have limited visibility on monetization (display or video), and do not see Facebook monetizing videos on Instagram in the next 12-months. As several brands including Lululemon, Burberry and Urban Outfitters have already posted videos on the site. (Lululemon has a 15 second video with 23,000 likes.) This corporate activity should provide a revenue opportunity similar to page posts ad format on Facebook.
Instagram appears to be growing at a rapid rate (but no monetization yet) and we would think the usage metrics of FB + Instagram would be quite positive across demographics. While the engagement issue seems to have limited visibility on resolution (despite generally positive comScore US mobile data), Facebook could announce some credible advertising programs or more metrics on benefits from current initiatives such as Custom Audiences which will lead to meaningful monetization of these two large web properties.