Nov 17, 2020 - Economy

Instagram cautiously considers paying publishers

Illustration of the Instagram logo with the light blinking as if it's recording.

Illustration: Aïda Amer/Axios

Instagram is mulling plans to pay publishers on its platform as it grows as a news and information source for users, sources tell Axios. 

Why it matters: Publishers are frustrated that prior monetization talks have been tabled from the second half of this year to an unknown date. 

Driving the news: Instagram plans to include select publishers in its next test in coming months for paying creators, sources say.

  • The company is still mulling a plan to create a revenue share program with publishers for IGTV ads, but it's moving slower than initially anticipated.
  • In the interim, it's beginning to experiment with opportunities to pay publishers to make content. The app has brokered some select partnerships with publishers in one-off cases where content is paid for.
  • Instagram and Buzzfeed last week announced the launch of a new IGTV social series called “BuzzFeed’s Show Off," that Instagram is helping to fund. 
  • Axios reported ahead of the election that Instagram paid ATTN: to create GOTV videos and content for the app.
  • Other publishers have carve-outs for Instagram written into their contracts with Instagram parent Facebook, sources tell Axios.

Sources say Instagram is being cautious about how it rolls monetization out for publishers, given that it's still trying to figure out how to share revenue with creators writ large.

  • In the past, publishers have complained about being bait and switched by Facebook via rushed deals. Instagram wants to avoid that headache.
  • To date, most creators make money on Instagram by hawking or selling their own products or products from brands, as opposed to doing revenue splits with Instagram or being paid by Instagram to create content. 
  • The company is currently testing ad revenue splits for creators, giving creators a 55% share of ad revenue created from their videos on IGTV.
  • It's also testing the roll-out of badges that creators can sell to fans to have their comments appear higher within Instagram Live.

Be smart: Instagram doesn't have a separate News tab where it would place licensed news content. The closest destination it has would be IGTV, akin to Facebook's Watch Tab, where Facebook does pay select publishers to make content.

  • Instagram debuted an updated layout last week that increases the visibility of and its shopping tab and Reels, its TikTok rival.

The big picture: Instagram has separate teams that work with publishers on rolling out new tools and optimizing content. Those teams for now mostly focus on how publishers can build an audience on Instagram, instead of monetization. 

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