Facebook is going after YouTube in SVOD play
Social media giant Facebook likes the look of the SVOD space – specifically, the kind of user-generated media hub that is Google’s YouTube. So it’s making a play for share in that market with an expansion of its Watch service. Watch is a TV-like platform that the company uses to showcase long-form videos from a number of creators. Although the service has failed to make many headlines, it’s proving popular with users: as many as 40% of Facebook users currently watch something on the platform every week.
Facebook’s share price has risen by 32% over the past year
SOURCE: Yahoo Finance
Facebook wants to encourage more creators to make their own shows on Watch. They’re hoping that the kind of massive content library YouTube enjoys will bring more views, and thereby open the door to further advertising monetization. As Facebook alters its traditional advertising space by making Newsfeed less corporate and more personal, Watch may eventually become the company’s new big marketing draw. And, of course, user generated content – unlike the kind of premium stuff Netflix and Amazon are putting out – comes without the premium price tag.
According to an anonymous source that is familiar with the matter, Facebook will offer creators a share of advertising revenue generated by their videos. This is similar to YouTube, and there is no end of aspiring filmmakers who will take both companies up on the deal. As of right now, some of its creators are paid a fee, and others aren’t.
YouTube has recently cracked down hard on its video content, after popular creators crossed some distasteful boundaries, posing with the cadaver of a suicide victim. Facebook, which has no such issues to deal with, can keep things relatively simple for its content creators. It also has a captive audience of more than 2 billion people. That’s a winning combination. Given how well the service seems to be doing just six months in, investors will be watching with interest.
Dominion holds Facebook and Alphabet, the parent company of YouTube, in its Global Trends Ecommerce Fund.
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