Head of Instagram: New in-app money-making features can help creators avoid Apple’s cut of proceeds

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  • CNBC Television published this video item, entitled “Head of Instagram: New in-app money-making features can help creators avoid Apple’s cut of proceeds” – below is their description.

    Instagram is making a big play for influencers. It hosted its first ever Creator Week, rolling out new moneymaking features. The social media company has implemented new shopping tools and the ability for creators to get “badges” when they hit milestones in order to earn additional money. Instagram is also testing a native affiliate tool that allows creators to earn commissions for purchases they inspire people to make. Adam Mosseri, head of Instagram, joined “Squawk Box” on Wednesday to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

    Facebook is setting its sights on the creator economy, hoping to allow millions of people to make a living off its family of apps.

    But the company wants to promote offline transactions between creators and companies in order to avoid Apple’s 30% cut of in-app purchases, Instagram head Adam Mosseri said Wednesday.

    “When there are digital transactions that happen on iOS, Apple insists that they take 30% of that. There’s a very few number of exceptions. For transactions that happen in iOS, we’re going to have to abide by their rules… but in general we’re going to look for other ways to help creators make a living and facilitating transactions that happen in other places,” Mosseri told CNBC’s “Squawk Box.”

    “So, for instance, if we could help brands and creators vet each other and find each other, they could make those transactions happen offline. For affiliate marketing, it’s real goods, not digital goods. So we’re going to try and lean in to the places creators can actually make a stable living,” he added.

    Apple generally takes a 30% rake from purchases of software or digital goods from apps distributed through the App Store. That would mean creators would eventually have to split revenue from goods sold within the app between themselves, Facebook and Apple. (Facebook hasn’t said how much of a cut it will take, but did say it will be less than 30%.)

    In order to skirt around that, Instagram could push for creators to connect offline with brands or other people, in an effort to make money off the iOS operating system. It’ll be a key issue for the company, which has spent the past several years feuding with the Apple.

    The fight for creators is heating up, with social media companies courting creators to spend more time on their platforms in order to bring in more advertising revenue. But the creators currently have the say in where they want to spend their time, so social media companies are increasingly trying to woo influencers in a way that could eventually be beneficial to both.

    Companies are introducing things like earning commissions on marketing, direct tipping and subscription content.

    “If we’re going to be the best home for creators online, we’re going to have to offer a suite of these types of monetization products because there’s a lot of competition and it’s heating up fast,” Mosseri said.

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