Meta is shutting down a bonus payment program it launched last year to motivate content creators to make more Reels, a short-form video offering that competes directly with TikTok. Meta first launched the incentive payments in 2021 and challenged content makers to create more short videos. The shutdown impacts Reels creators on Facebook, while the Instagram incentive plan only affected U.S.-based creators—the program only operated in the U.S.

Business Insider first reported that this cancellation of the program means that firms now are seeking to row back from paying creators based on the popularity of their short videos. According to the report, Meta will honor any commitment for bonuses for 30 days.

Meta said the company may relaunch the program in "targeted" ways if Reels enter a new market. That is somewhat weird to hear, since the short video product is already available in more than 150 countries.

As the portal reported earlier, creators received bonuses by this program in healthy amounts. Many creators accumulated more than $10,000 in bonuses, and some even claim to receive around $35,000 in a month. But these creators had to accumulate millions of views on their Reels, and Meta liked handing out money to make the format a hit.

Given that short video is one of the most popular formats on social media today, Meta is probably trying to bank ad money. Last year, it expanded its overlay ads experiment to creators in more than 50 countries in addition to displaying in-stream ads. For both these ad formats, the company shares 55% of the revenue with the creators.

Last year, Mark Zuckerberg said that Reels have now reached an annual revenue rate of $1 billion. Still, the company would love it if the format started raking in more money at the same time it continues burning cash on metaverse efforts.

During Meta's Q4 2022 investor call, Zuckerberg admitted that Reels was not generating enough money.

The next bottleneck we are focused on to continue growing Reels is improving monetization efficiency or the revenue that's generated per minute of Reels watched. Currently, the monetization efficiency of Reels is much less than Feed. So the more that Reels grows, even though it adds engagement to the system overall, it takes some time away from Feed and we actually lose money, he said.

If the company is nuking bonuses, then those who produce short videos on Meta platforms will need incentives so that people do not choose such alternatives as TikTok and YouTube Shorts. Facebook committed to providing more tools with monetization so that creators will gain through Reels.

This year, we are focusing on adapting and enhancing these monetization tools for short-form video. We will continue to expand our ads on Facebook Reels tests to help more creators earn ad revenue for their Reels and grow virtual gifting via Stars on Reels, said Facebook head Tom Alison in a blog post earlier this week.

But Meta is not an outlier when it comes to halting creator bonuses for short videos. Snapchat, YouTube Shorts have resorted to ad revenue-sharing models instead of going all out on creator funds.