How Are Social Media Companies Riding the Short-Form Video Wave?

By Patricia Miller

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Short-form video has changed the landscape of social media, leading companies like QYOU Media, Meta Platforms, Alphabet Inc and Tencent Holdings to adapt with exciting strategies.

Short-form video content is a craze which has swept social media and offers marketers the best return on investment, according to HubSpot. So how are media and social media outfits capitalizing? This article discusses the issue in relation to Meta Platforms (NASDAQ: META), Alphabet Inc (NASDAQ: GOOGL), Tencent Holdings (OTCMKTS: TCEHY) and QYOU Media (TSX: QYOU) (OTCQB: QYOUF).

QYOU Media (TSX: QYOU) (OTCQB: QYOUF) operates as a media company, producing and distributing content created by social media influencers, artists and digital content creators on television networks, satellite television, over-the-top media and mobile platforms.

The company also manages influencer marketing campaigns for major film studios and key household brands.

The company’s most recent earnings showed that revenue for the quarter ended 30 June 2022 came in at a record of CA$6.88m, up by 163% compared to the same period in 2021. This represents the highest quarterly revenue in QYOU Media’s history.

It’s another quarter of enormous year-on-year growth from the business, which has developed a unique model to capitalize on the popularity of short-form video and the exciting opportunity on offer in India.

The unique offering is a blend of social media marketing and TV entertainment. QYOU Media helps advertisers to connect with influencers on social media, while also producing TV shows constructed from the most popular Indian social media stars’ short-from video content.

It’s a model which ensures simple creation of simple, cheap and engaging shows which are building attractive audiences for advertisers to reach out to on four already thriving channels operated by QYOU Media’s Indian entertainment brand, The Q India.

The channels have found success so far, with The Q’s flagship Hindi language channel being viewed by 113 million people per week, according to stats released in April. More is on the way too, with a new channel dedicated to videogames set for launch in September.

Mark Zuckerberg’s Meta Platforms (NASDAQ: META) operates as a social technology company. The company builds applications and technologies that help people connect, find communities and grow businesses. Meta Platforms is also involved in advertisements, augmented and virtual reality.

The social media giant’s most recent earnings showed that the company earned $28.8bn during its second quarter, which constituted a drop of 1% compared to the same period last year. Additionally, net income was down by 36% at $6.7bn.

Meta Platforms is most notably seeking to capitalize on the popularity of short-form video through its Instagram platform. For example, the company is consistently releasing new features for video editing and sharing on the platform.

These include the July announcement of the company’s enhancement of Instagram’s Reels feature with new innovations such as giving users the option to preload audio and clip placeholders to use as templates in new videos they create.

However, the news from Meta Platforms’ short-form video technology is not all positive. Advertisers are reportedly struggling to get their heads around the Reels feature, which is available on Facebook as well as Instagram.

The company is even urging advertisers to conduct tests using rival social media platform TikTok in order to optimise their content for the platform.

Alphabet Inc (NASDAQ: GOOGL) operates as a holding company and is headed by Sundar Pichai. The business, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce and hardware products.

Alphabet Inc’s latest earnings update showed that its revenues climbed by 13% to $69.7bn in the three months ending 30 June. However, the same period saw net income decline from $18.5bn in the second quarter of 2021 to $16.0bn.

YouTube ads revenue came in at $7.3bn, while the company gains further revenue from the video platform through subscriptions to its premium service. Like other social media and online media giants, the platform is attempting to get users hooked on its short-form video offering.

Alphabet Inc is achieving some success here too, having notably attracted 1.5 billion users to the YouTube Shorts feature. In order to encourage continued growth of the feature, the company put together the YouTube Shorts Fund.

This initiative is a $100m fund for distribution over the course of 2021-2022, which all YouTube Shorts creators are eligible for. The idea is, at the end of each month the platform distributes funds to the creators who have attracted the most views and engagement, essentially functioning as a reward for bringing new users to the platform and keeping them Interested.

Alphabet Inc is clearly hoping that a creator-first stance will help them win the battle for supremacy among short-form video platforms.

Tencent Holdings Limited (OTCMKTS: TCEHY), helmed by Ma Huateng, operates as a holding company. The company, through its subsidiaries, provides social networking, music, web portals, e-commerce, mobile games, Internet services, payment systems, entertainment, artificial intelligence and technology solutions. The business serves customers worldwide.

The company’s most recent earnings showed that revenues had dropped by 3% compared to the comparable second period of 2021. Operating profits were also lower as the business saw margins compressed.

This is the first drop in sales reported by the business since 2008 and many investors appear concerned that Tencent Holdings Limited’s future prospects have been damaged by China’s struggling economy.

Though social media users and investors in the West might not be clued in, Tencent Holdings Limited is another major player attempting to capitalize on the growth of short-form video.

The company’s WeChat platform has short-form video functionality and with a total user base of more than 1 billion people Tencent Holdings Limited has a huge platform through which it can push this content format.

However, with the parent company now showing a downturn in revenues as well as its first reduction in workforce, WeChat might not be destined to hold the throne as the top dog in China. Indeed, it’s worth noting that the business faces intimidating competition from ByteDance, the company behind TikTok.

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Topics:
Social Media Platforms
Media and Entertainment
Industries:
Communication Services
Information Technology
Companies:
QYOU Media Inc.
Google
Meta
Tencent Holdings

Author: Patricia Miller

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Patricia Miller does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Patricia Miller has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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