Meta’s Reels, the company’s TikTok-style short video format feature, is now generating as much as $50 billion in annual revenue and reshaping how the social media giant makes money, according to The Wall Street Journal.
Once a low performing add-on that struggled to engage users, Reels now drives significant advertising demand and contributes to Meta’s efforts to blend social media with AI to attract audiences and advertisers alike.
Reels was introduced by Meta in 2020 as part of Instagram and Facebook in response to the rapid global rise of TikTok, which had captivated younger audiences with its looping short videos. In its early years the feature lagged behind competitors and failed to generate meaningful revenue, with internal reports noting low engagement and weak monetization.
Over time however, the company focused on refining the product by improving its artificial intelligence based recommendation systems and encouraging more original video content. These changes gradually increased watch time and user interaction across Instagram and Facebook, laying the foundation for a dramatic shift in Reels’ commercial potential.
By late 2025 Meta executives were reporting that users were spending more time watching Reels than they were viewing other short video services on rival platforms, a key indicator of expanding user engagement.
The turning point came as advertisers began to recognize the value of placing ad dollars in front of highly engaged short video audiences. Enhanced targeting tools and AI driven optimization helped the platform deliver higher quality ad placements. Ad revenue tied to Reels now accounts for a growing share of Meta’s overall advertising business, which remains by far the company’s largest source of income.
According to executive commentary on recent earnings calls, Reels has achieved an annual run rate exceeding $50 billion, a milestone that places it among the top revenue generators in the global digital ad market. That level of revenue is comparable to the annual sales of major consumer brands and signals how deeply short video has been embraced by marketers looking to reach consumers on mobile devices and beyond.
Looking ahead, Meta plans to expand Reels beyond smartphones to larger screens such as televisions, bringing its video content to more parts of daily life.
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