As reported by Peter Kafka on Recode last week:
“Facebook is starting to talk to TV studios and other video producers about licensing shows, with the hope of boosting the social network’s video efforts. The talks, which include discussions for scripted shows, game shows and sports, are being led by Ricky Van Veen, the College Humor co-founder who joined the company earlier this year.”
Van Veen says,
“Earlier this year, we started rolling out the Video tab, a dedicated place for video on Facebook. Our goal is to kickstart an ecosystem of partner content for the tab, so we’re exploring funding some seed video content, including original and licensed scripted, unscripted, and sports content, that takes advantage of mobile and the social interaction unique to Facebook. Our goal is to show people what is possible on the platform and learn as we continue to work with video partners around the world.”
Facebook is looking more and more like a media company, rather than a tech company. Mathew Ingram of Fortune says:
“Yes, Facebook is a platform, and yes, it is powered by technology. But it is also a hugely powerful entity that controls the distribution of media in a way no other company ever has. And now it is funding and developing its own content. That sounds like a media company to me.”
Howard Homonoff in Forbes concurs, and adds insight into Facebook’s advertising revenue:
“Facebook has a nice little business in the media pillar of advertising. There are now 4 million advertisers on Facebook, and it has grown this number by 50% in the last year. Total ad revenue has grown nearly 50% as well in that period, from $3.4 billion in the first half of 2015 to $5.7 billion in the first half of 2016. In combination with Google, Facebook takes 85% of every new dollar spent on digital advertising. Facebook is not simply in the media advertising business but has become almost literally indispensable for many marketers – for better or worse.”
My take: I think it’s all a question of eyeballs. With Alexa reporting the top three websites are Google, Youtube and Facebook, I’d be very afraid if I owned a traditional media company. Streaming is over 70% of nighttime bandwidth; OTT is where the eyeballs are going. Facebook sees this trend and wants to be part of it.