Vertical video standardises as streaming giants and social platforms pivot to ad revenue
The dominance of vertical video has shifted from a social media trend to the primary revenue driver for digital entertainment, with major tech firms aligning their product strategies around algorithmic, ad-supported short-form content.
Short-form vertical video has cemented its status as the dominant format for digital entertainment and advertising, driven by a rapid industry-wide adoption of the model pioneered by TikTok. Major platforms, including Instagram and YouTube, have standardised on this structure, effectively shifting user engagement from social connection-based feeds to algorithm-driven content. This format now generates substantial revenue, with Meta projecting Reels to become a $50 billion annual business by 2025 and YouTube reporting 200 billion daily Shorts views by late 2025.
The financial scale of this shift is evident in recent platform disclosures. Meta reported in 2024 that Instagram users spent more than half their time in Reels, a metric that underpins the company’s projection that the feature will generate $50 billion annually across its apps in 2025. Similarly, YouTube noted that Shorts generate higher revenue per watch hour than standard videos, reinforcing the economic incentive for platforms to prioritise vertical content over traditional horizontal formats.
The trend has expanded beyond social media, with streaming services such as Netflix, Disney, and Spotify developing vertical video interfaces to capture advertising revenue and compete for user attention. Specific implementations include Disney’s 'Verts' and vertical clones branded as 'Clips' by Netflix, Prime Video, and Paramount Plus. These services are adapting to a landscape where short-form video is identified as the most-used and most successful marketing content in 2025, according to a HubSpot report.
AI is increasingly powering ad targeting and placement, creating a self-fulfilling cycle for vertical video adoption. As platforms refine their algorithms to serve content based on user behaviour rather than social graphs, the efficiency of AI-driven ad delivery makes vertical formats particularly lucrative. This technological synergy ensures that as vertical video gains market share, it becomes easier for advertisers to scale campaigns, further entrenching the format as the industry standard.
Institutional responses to this shift include Facebook testing a new app version that loads a full-screen video feed upon opening, potentially eliminating the traditional social feed. This move signals a decisive break from the platform’s origins as a social network, prioritising entertainment and ad inventory over user connections. The convergence of streaming services and social platforms around vertical video suggests that the format will remain the primary vehicle for digital advertising and user engagement in the near term.
