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Instagram can’t be the new TV until it figures out how to pay for its TV shows

Instagram doesn’t have a business for IGTV, but it’ll need to make money quickly.

A celebrity takes a selfie with a group of fans
Popular YouTuber Lele Pons is one of the creators helping Instagram launch their new long form video app.
Jesse Grant/Getty Images for WE

Instagram wants to be TV for young people. That much was clear during an over-the-top press event Wednesday in San Francisco where the company rolled out IGTV, a new app specifically for long-form, vertical video.

Less clear: How’s the money part going to work?

Instagram CEO Kevin Systrom has a straightforward argument: Teens are watching less TV, but they’re watching more video on Instagram than ever before. And that video is often coming from “creators,” the term used for popular YouTube stars, former Vine stars and the like.

Systrom wants those creators to make stuff for IGTV, too.

That idea makes a lot of sense on paper. But Instagram didn’t address the most important element of this whole endeavor: If Instagram wants creators to publish their content on IGTV instead of other platforms, it has to pay them. And it’s not clear right now how that’s going to work.

“We are committed to helping [creators] build their careers and make a living doing this work,” a spokesperson told Recode after Tuesday’s presentation. “After launch, we’ll be exploring and testing ways to help creators monetize.”

The success of IGTV is dependent on that happening. People who create good content online go where they can make a living.

YouTube gets grief about how much it pays its content partners, but it does pay them — generally via a revenue share — and that’s why it has such a strong hold on today’s “creators.” Vine never paid creators, so they left, and Vine folded. Facebook wants people to make videos for its platform, but — weirdly — has yet to build out a system that will pay people consistently for their work.

There are some obvious ways IGTV could try to make this work. The most likely is that Instagram will put mid-roll or pre-roll video ads inside these long-form videos and split the revenue with creators, the same strategy it’s using for Facebook’s new video section, Watch. It could also roll out a subscription offering, something it recently started to test on Facebook, or it could even pay creators outright for some of their work. (Facebook has paid publishers directly before, but has also made clear the longterm plan is a revenue split, not licensing deals.)

Facebook is a good cautionary tale for its corporate cousins at Instagram: It has giant reach, but most creators don’t spend much time there, because there’s no money there. Lele Pons, one of the creators Instagram brought in to help pitch IGTV, posts her new videos to YouTube. On Facebook, where she has four million followers, she posts the YouTube link.

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