Viral or value? The two faces of today’s video platforms

Opinion

Video is heading down two paths: a short vertical market, where content is produced at low cost and driving vast engagement, and a premium long-form market that can be effectively monetised.

How do you like your video? Vertical or horizontal, landscape or portrait, 16:9 or 9:16? Are we witnessing a split in the digital video market that is more than just a change in the orientation of the screen — with one side dominated by premium long form and the other by viral, snackable video?

In a recent comment piece, we looked at how YouTube is behaving more and more like a TV platform and its share of the “living room” is only growing ever greater. This is largely down to longer-form video; however, the market for short, often vertical video has exploded in the last few years, with videos delivering half-a-billion views now commonplace. But what do these views really mean?

When is a view not a view?

First, some basics on metrics that sound the same but are very much not. Simple question: what is a view?

• On YouTube, it’s when the viewer has seen one second of content (we did some testing on this).
• Facebook and Instagram choose to get around the question by providing several options: it could be a three-second view or a 30-second view. A monetised view only counts after one minute. When Meta wants to count Reels, it’s a “play”.
• TikTok equates an impression with a view by making every video autoplay. If a video is in your feed, it’s a view. Sadly, with little third-party measurement (beyond some integration with Nielsen on YouTube), there is no way of comparing platforms using the same methodology. That would be nice for advertisers, I’m sure.
• Other platforms such as Snap and Twitter use a blend of these methodologies depending on the specific format or the sharing method.

How meaningful is a view?

A YouTube view requires the individual to actively choose to watch by clicking on a thumbnail. Facebook and Instagram have a mix of methods and a sketchy track record on data accuracy, so let’s assume a mix of intended and autoplay. On mobile, it can even take the effort out of doomscrolling and does it for you.

TikTok reduces the intent to view to zero by autoplaying everything.

Let’s run this through the “view calculator”:

One TikTok video could easily clock up to 500m views. But you could argue these are actually impressions, as we have no idea if the user watched it or swiped by. A 5% “view-through rate” would be reasonable to assume — that is to say 5% of individuals might stick around to watch the video. That’s 25m actual views (as opposed to 500m “autoplays” for a split second).

And if that video is 20 seconds, then total viewing is just 138K hours. That’s assuming everyone watched the full 20 seconds, which is unlikely, multiplied by 25m views.

This is equivalent to 138,000 views of a one-hour video on YouTube (again, assuming every viewer watches to the end, which is not likely — but we’ll do this for ease of comparison).

So, as you can see, even attempting to compare apples with apples is hard. A YouTube video with 138K views (not exactly headline-making) could likely deliver the same total watch time as a TikTok video with 500m “views”. Watch time — or, as it could be referred to, “attention” — is important for many reasons.

Show me the money

As a result of the difficulty in comparisons, the cost/revenue measures, RPM (revenue per thousand views) and its ad buying companion CPM (cost per thousand ad views), become less useful as metrics, as a view could indicate either an “inability to navigate away quick enough” or a user-intended search leading to a one-hour watch time. It’s like equating the effect of channel-hopping on a TV with sitting down to watch a full-length movie — all in the same metric.

Now, let’s run this through the “monetisation calculator”, using average results we see across the 700 channels we manage at Little Dot:

Joe Bloggs YouTube Channel video RPM: £6.00
Joe Bloggs YouTube Channel vertical RPM: £0.05

So that’s over 100 times less revenue per view for a Shorts vertical. But that’s OK, because a short video gets more views, right?

Not really. We see that, on average, for the same channel or account, a vertical video might receive only roughly four times the views of an average video.

Vertical videos still require time and effort to make, even if they are only one-minute clips, so making £5 revenue is simply not enough to support this, assuming we are trying to monetise directly.

On Facebook and Instagram, where Reels are already the more dominant format, the picture is the same. However, these shorter videos have the possibility to make a little more revenue — but not much. We’ll come back to Meta later.

TikTok only does short content, despite making a lot of noise about 10-minute-plus content — launching a TV app and encouraging longer formats with higher creator fund payouts. And it doesn’t share revenue with creators — the underpinning of both Meta and YouTube’s support for creators of video content.

What does this all mean?

From the point of view of the premium, broadcast-quality rights holder, distributor and intellectual property (IP) owner, YouTube is a legitimate source of revenue. Premium content such as full-length episodes of evergreen TV shows, like Ramsay’s Kitchen Nightmares, is readily available on YouTube to watch in full and often as multi-episode supercuts.

And proof is in the pudding: Little Dot has paid out over $100m to rights holders in the last three years, thanks to monetisation across platforms that support longer-form video content (10-minute-plus). The arrival of short, vertical video presents a significant challenge as the commercial return doesn’t seem to justify the investment if monetisation is your end goal.

So what if those rights holders, and other companies like us, hold back on creating premium content for vertical video — where will it come from?

TikTok proudly boasts that 50% of its users also upload content, so they could arguably continue without “premium” content. It is very difficult for an existing IP entertainment publisher to monetise its content on TikTok — as there is no advertising revenue share and influencer/ad-funded content simply isn’t possible or is extremely difficult.

There are plenty of reasons to produce content on TikTok, and vertical in general, but direct monetisation isn’t one of them — for the time being, at least. The longer-term question is: how can TikTok incentivise this large industry of rights holders to come on to the platform?

The biggest mystery is Meta, which has a poorly defined strategy when it comes to video. Indeed, CEO Mark Zuckerberg has acknowledged that Facebook and Instagram may have missed the growth in video, even while counterintuitively knowing that video represents 50% of Facebook users’ time spent on the platform.

This has led to an odd product mix, with Reels forced into users’ feeds on Instagram (later reversed due to user feedback), while the existing “Facebook Watch” product has staggered along until now.

Meta recently announced that the native video player will default to vertical, alongside a new monetisation methodology that no longer rewards watch time as it pivots to engagement. The clear expectation is that all video across Facebook and Instagram will resemble a Reel, coupled with autoplay. We can imagine Meta will be proudly boasting of video view play growth at its next earnings call.

Vertical video has its place

If the objective is reach, then vertical video delivers on every platform, as its bite-size nature means the audience will often watch hundreds of videos in one session — providing ample opportunity to reach a diverse audience through both advertising and branded video.

These formats often reach a younger, more diverse demographic and, as such, provide great opportunities for brands and advertisers to deliver targeted messaging to a sometimes hard-to-reach demographic.

And, yes, at some point Twitter was going to be a video platform and then Vines were coming back. Recently, X has announced a smart TV app with little detail as to what or when, beyond a few launch partners. With the recent track record at X, this one will be on a watching brief (pun intended).

So the “social video” market is charging down two divergent paths. A short vertical volume market, where the majority of content is produced at low cost and driving vast engagement, and a premium long-form market for which investment in quality can be commercially rewarded through monetisation.

This leaves us with the question, ignoring any potential TikTok ban: do we really have enough content creators and revenue-generating opportunities to sustain three major (social) video platforms, catering to both quick, snackable moments and relaxed, lean-back viewing experiences?

Graham Swallow is head of data and product strategy at Little Dot Studios