Some are speculating that this is a competitive response to Vine, Twitter's clever short-video app. But what if Facebook had a broader purpose in mind—habituating its users to seeing videos?
It's An Ad, Ad, Ad World
Marketers are eager to buy video ads on Facebook. But users, used to the quiet experience of reading updates and viewing photos from friends, may find them jarring, especially if the ads start playing automatically.
Yet Twitter's Vine has proven remarkably popular, with its six-second videos playing automatically within its app and in tweets. Twitter recently revealed Vine has 13 million users, and it's added an Android version of the app alongside the original iPhone version.
Vine presages a world where the magic of Harry Potter becomes everyday reality—where we are used to photos moving on the page, as they do in The Daily Prophet, the newspaper of Potter's wizarding world. Or, perhaps, like the dystopian future of Minority Report, all our screens will play video—video targeted to our networked identities.
Already, teenagers live in such an animated universe. You may know it as Tumblr, the paradise of animated GIFs Yahoo just bought for $1.1 billion.
How Instagram Videos Will Play On Facebook
So let's assume Instagram's team, led by cofounder Kevin Systrom, have found a reasonably clever and smooth way to include video as an option in its app.
Let's also assume that when Instagram users take those videos, they can choose to post them simultaneously to their Facebook profiles, as they already do with photos.
Suddenly there will be a lot more video on Facebook than there is now, since it will be radically easier to capture short clips and share them with friends. And this video will, one assumes, be far more compelling to users. So instead of glazing over it, they'll eagerly watch.
The shift to mobile and context-sensitive design will be crucial factors in whether the strategy flops or succeeds. Vine's app smartly detects whether a user has headphones plugged in before deciding whether to play sound. Instagram's will hopefully do the same.
New Space For Native Ads
To make boatloads of money off of this, Facebook doesn't need to put ads on Instagram. Instead, smart marketers will post short videos to their Instagram accounts—presumably funny, watchable stuff—and crosspost them to Facebook. They'll then pay Facebook to boost the frequency with which people see those video clips.
That's a strategy known in the marketing world as "native advertising," and it's precisely how Twitter makes money.
Twitter, of course, stands to profit in the same way from Vine, which has already been embraced by brand marketers. And it likewise doesn't have to change how it sells ads: All marketers have to do is pay Twitter to promote tweets that happen to contain Vine clips.
Conventional video advertising—that is to say, television—is a $70 billion market in the U.S. alone. It's reasonable to think Twitter and Facebook's video formats could capture at least a sliver of that. Imagine movie trailers and television teasers cut down to six-second blips: Hollywood alone could bankroll this business, with content that we already know people want to watch.
A Cold War Over Hot Video Clips
Facebook and Twitter do have a clear rivalry here. But it's not for consumers' usage of video-sharing apps. Instead, it's for marketing dollars. If anything, they both benefit from habituating users to the idea of short video clips as part of the flow of information in their feeds.
Where they will clash is the consumption of video. Twitter and Facebook are using Vine and Instagram as proxies in their battle to control the flow of content on the Web. First Instagram cut off its photos from Twitter feeds, forcing Twitter users to click through to its website. Vine users post videos to Facebook—but the videos do not play on Facebook itself. One assumes Instagram will likewise favor Facebook, with autoplay being a feature that's reserved for Instagram and Facebook's own websites and apps.
And now, please enjoy a video—or is it an advertisement?—of my dog, Ramona the Love Terrier.