META - Meta Faces Rising Risk Of Free-Cash-Flow Burn As Creator Payouts Evolve Says Analyst | Benzinga
BMO Capital analyst Brian Pitz reiterated a Market Perform rating on the shares of Meta Platforms Inc (NASDAQ:META) with a price target of $450.
Content creators obtain traffic from 12 sources, including social (Instagram remaining the biggest portion), and just half of the +200 million creators globally are monetizing their content.
Hence, the analyst deems Meta and other social platforms will need to increase their creator payout to ensure that engaging content remains on the platform.
If Meta chooses to pay creators similar to the nominal dollars that they receive on YouTube for longer-form content, it could increase cost of revenue by $3-5 billion annually, noted the analyst.
Since Creators are increasingly seeking alternative income streams as Instagram already drives a massive $15 billion of off-platform brand deals, ...