The Big Sip
Image: The Verge
Instagram is pursuing TV screens because Reels dominate user time but generate less than 10% of ad revenue. Meta needs the higher-value advertising that living rooms provide.
Adam Mosseri announced on 9 October 2025 at Bloomberg Screentime that Instagram is exploring a dedicated TV app, calling the delay a "mistake."
Connected TV ads command $15–65 CPMs with 90% completion rates, compared to mobile's sub-$10 rates. YouTube already captured 13.4% of all US TV viewing by July 2025 while earning $54 billion in 2024.
Will Instagram price TV inventory above or below YouTube's rates when it launches?
This will reveal whether Instagram prioritizes market share through lower prices or attempts to command premium rates for user-generated content on TV screens.
[Analysis] YouTube holds the top TV share in the U.S., setting the bar Instagram must clear. TV Tech
Instagram spent a decade training users to hold phones vertically, then realized the real money's in screens you can't hold at all.
Here’s The Brew
Meta built Reels to compete with TikTok. The strategy succeeded in capturing user attention but created revenue problems.
Within hours of Instagram hitting 3 billion monthly users in September 2025, analysts identified the issue. Reels consume half of all Instagram time but generate one-tenth of the ad revenue.
Vertical video moves past users faster than Feed posts, giving advertisers fewer seconds to make an impression. TikTok trained users to skip in three seconds. Instagram copied the format and inherited the same monetization challenges.
Feed ads display long enough to register. Reels disappear before the call-to-action loads. Meta can add more ads to Reels, but that reduces the scroll speed users prefer.
Instagram is pursuing TV, where a single 30-second spot commands $15–65 CPMs and viewers can't swipe away.
Engagement dominance created a revenue problem.
Capturing user time on mobile doesn't guarantee capturing advertising dollars on larger screens.
Turns out, you can win all the thumbs and still lose to the sofa.
Two Sides, One Mug
Image: Digit
Pro: TV screens offer premium viewing with 90%+ ad completion rates and CPMs up to 4x higher than mobile. This gives Instagram a way to increase revenue from Reels, which currently generates less money than Feed and Stories, even though it consumes more user time.
Con: Instagram enters a mature TV streaming market where YouTube already commands 13.4% of all viewing with a 4-point lead over second-place Disney. Instagram will either price below competitors (reducing margins) or struggle to command premium rates for vertical, user-generated content displayed on horizontal screens.
Our read: Instagram needs the revenue premium that TV advertising provides. Reels engagement is growing faster than revenue generation and eating into higher-margin Feed content. TV advertising offers 3x the revenue of mobile.
Receipt of the Day
Emarketer's Instagram ad revenue format breakdown (December 2024) — The pivot addresses a revenue problem. Reels captures half of the user time but generates less than 10% of ad dollars. Instagram needs formats that generate more revenue per engagement.
Spit Take
"TV ads: 90% completion. YouTube mobile: 31%." — AI Digital, 2025
Coffee Break Links ×3
Nielsen's July 2025 Media Distributor Gauge [Report] — YouTube hit 13.4% of all US TV viewing, the largest lead by any media company since Nielsen started tracking in November 2023. The gap between first and second place (Disney at 9.4%) is now 4 full percentage points.
Connected TV Advertising Guide 2025 [Analysis] — Breaks down why CTV commands $15–65 CPMs vs mobile's sub-$10 rates: 90%+ completion rates, full-screen format, and household-level targeting that links TV viewing to mobile purchases.
Instagram Will Make Up More Than Half of Meta's US Ad Revenues in 2025 [Report] — Instagram's projected to hit $32 billion in US ad revenue (50.3% of Meta's total). Still, the format breakdown reveals the Reels monetization gap that's driving the TV push.
Join your team of caffeinated skeptics. ☕
Opinionated world news that respects your time.
One bold take, the best counter, and the receipt(s) that prove it (all in six minutes).
Mugshot Poll 📊
Would you watch Reels on your TV?
Before we wrap up today…
Does crypto/Web3 intrigue you?
Is worrying about losing money or getting scammed stopping you from investing?
This course is for you!
Click to share (2 referrals get you free access to your very own crypto mastery email course).
Everything you need to unlock crypto in 5 days (for beginners).
You can read Friday’s newsletter on China’s rare earth play here.
For the love of coffee, see you tomorrow!
Enjoy your Monday, keep it caffeinated.
How did we do?
Thanks for reading!
Be sure to get your daily curse and coffee fix by hitting that subscribe button.