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Instagram Reels is a real threat to TikTok

August 6, 2020, 6:06 PM UTC

Good morning, Data Sheet readers. This is Fortune writer Aric Jenkins filling in for Adam.

There’s been a lot of coverage of TikTok this week, what with President Trump threatening to ban it in the U.S.—incensing Beijing and opening the door for Microsoft to buy the popular social media app for a reported $30 billion. Lest we forget, Facebook has also been working on a TikTok clone for Instagram that finally arrived on the platform yesterday. 

The new feature, Instagram Reels, is no small deal. Remember the last time the photo and video app copied a high-profile rival: Has Snap ever fully recovered from Instagram lifting the temporary 24-hour “Stories” feature that sent Instagram’s monthly active users to over 1 billion? Every time users scroll through a few Stories, they’re served an ad, which makes Instagram money, of course, not to mention a cut of all those e-commerce sales.

We don’t yet know the extent to which Instagram will leverage Reels for revenue-making ventures like ads or online shopping. But we do know that copying yet another rival’s trademark feature—15-second videos with visual effects that sync to music and audio files—threatens to keep more people on Instagram and off TikTok. With that could come the high-profile creators that make these apps buzz.

The timing couldn’t be better for Instagram, really. TikTok is under siege. Facebook has picked the perfect time to crush an upstart competitor.

But early reactions to Reels may be a little concerning to Facebook. “I have not seen one original piece of content on Instagram Reels yet. It is just full of TikTok memes, dances and videos,” said Wall Street Journal tech columnist Joanna Stern. “And it just doesn’t work. Without TikTok’s algorithm backing this, the feed is just random and feels stunted.”

Ultimately, though, it may not matter. “My main takeaway from Reels is the same one that, ultimately, led to me eventually stop using Snapchat once Instagram launched stories,” wrote BuzzFeed’s Stephanie McNeal. “It’s just so easy to have everything in one place.”

Yep. That’s the same reason I stopped using Snapchat, too.

This edition of Data Sheet was curated by David Z. Morris. Check out The Ledger, the fintech newsletter he edits weekly.

NEWSWORTHY

20 state Attorneys General call on Facebook to better police hate speech. The social media giant has evaded and disappointed nearly every group trying to help/pressure it to get its act together. Corporate giants have suspended advertising, civil rights groups have blasted management indifference—and now the law enforcement chiefs of Illinois, New Jersey, and other states are asking for Facebook to do a better job fighting hate speech and disinformation. Maybe that’ll finally get Zuck’s attention?

The alleged Twitter hacker’s hearing was zoombombed by...other hackers, of course. The judge in a hearing for one of three accused players behind last month's massive Twitter hack apparently isn’t much of a tech wiz himself. The judge allowed open access to the hearing for a 17 year old accused of helping impersonate Twitter staff to gain admin-level access to prominent accounts. Naturally, someone invaded the hearing, took over the stream, and treated viewers to some good old-fashioned pornography.

Autonomous driving pioneer Anthony Levandowski has been sentenced to 18 months in prison in a plea deal over his central role in the theft of intellectual property from Google spinout Waymo. Levandowski also agreed to $756,499 in restitution to Waymo for research data he took with him when he left the company in 2016 to form Otto, nominally an autonomous trucking company. Otto quickly sold to Uber for $600 million, which could make the fine, and even the prison time, a pretty decent deal. “Anthony deeply regrets his past decisions,” his lawyers said.

Disney’s live-action Mulan remake will skip US theaters and go straight to streaming on Disney+, where it’ll cost you a cool $30. The deferral of a highly-anticipated summer tentpole to streaming is, yes, a concession to the stark realities of the pandemic. But it’s hard not to read it in light of last week’s deal between Universal and AMC to radically shift theatrical release windows. Circumstance and consumer demand, it seems, are both arrayed against the future of movie theaters.

FOOD FOR THOUGHT

The tech world has been understandably preoccupied with Donald Trump’s threats to ban Chinese-owned app TikTok in the U.S. For those in the business, the matter is as serious as a heart attack, given how little we can trust TikTok’s handling of user data.

But Wired rightfully points out that TikTok might be a distraction from much bigger security concerns, from America’s vulnerable electric grid to China’s treatment of the Uighurs (to say nothing of the pandemic). Former Trump advisor John Bolton even alleges that the president once told Xi Jinping that putting Uighurs in concentration camps was, in Bolton’s words, “exactly the right thing to do.”

At least he’s keeping the TikTok teens safe, right?

IN CASE YOU MISSED IT

Everything to know about Instagram Reels, Facebook’s new TikTok rival By Danielle Abril

Samsung tests the global phone market with expensive new devices By Aaron Pressman

Wayfair finally turns a profit thanks to COVID-19 spending surge By Phil Wahba

Rackspace shares drop 20% one day after IPO By Jonathan Vanian

(Some of these stories require a subscription to access. Thank you for supporting our journalism.)

BEFORE YOU GO

The masks were called muzzles, germ shields and dirt traps. They gave people a “pig-like snout.” Some people snipped holes in their masks to smoke cigars. Others fastened them to dogs in mockery. Bandits used them to rob banks.

That's from a New York Times story about opposition to public mask mandates … during the 1918 flu pandemic. The more things change.

David Z. Morris

@davidzmorris

david.morris@fortune.com