Step 1) Create a video-only feed.
Step 2) Spend money on live and non-live programming.
Step 3) Make money by inserting ads in those programs.
Facebook wants to become more of a destination for video viewers, on par with Netflix, Hulu, Amazon and YouTube. That’s why the company is ramping up the roll-out of a video-only feed and paying publishers like CNN, The New York Times and BuzzFeed to produce live broadcasts. And it’s why the company is now looking to spend money to stock up on non-live shows.
Facebook has begun talks with media companies to acquire original shows as well as licensed programs that would be distributed on the social network, a Facebook spokesperson confirmed after Recode broke the news earlier on Wednesday.
Facebook’s head of global creative strategy, Ricky Van Veen, summarized the social network’s strategy in an emailed statement.
“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,” said Facebook’s head of global creative strategy, Ricky Van Veen, in an emailed statement.
The Facebook spokesperson declined to offer details about the types of media companies and creators with whom Facebook would like to sign deals or what genres of programs the company has its eyes on. But based on Van Veen’s statement, it seems that almost anything is on the table, so long as people would watch it on their phones and want to do more than just watch it.
The spokesperson also declined to say how Facebook expects to make its money back. But another Facebook exec may have already answered that question.
Earlier this year Facebook started inserting mid-roll ads within some Facebook Live streams as a test for how the company could make money from that programming. Those mid-roll ads, or “ad breaks” as Facebook calls them, could just as easily be inserted within a non-live program, like the ones Facebook plans to acquire, and starting sometime next year, they probably will be.
“Next year, we’re going to start thinking about how that type of monetization opportunity could potentially be brought to regular videos as well,” said Facebook’s VP of partnerships, Dan Rose, in an interview with Poynter in September.
Whether Facebook would slot those ad breaks within the programs it pays for is an open question. It’s a possibility, but there’s a more probable — and sustainable — scenario for how Facebook will generate revenue.
Facebook could instead use the programs it buys to pull in audiences who hadn’t otherwise considered Facebook in the vein of Netflix and YouTube, and Facebook could use the ad breaks to draw programs from other media companies and creators, with Facebook cutting them a share of the ad revenue so that they can make money without that money coming out of Facebook’s coffers (though Facebook has struggled in its previous attempt to share video ad revenue with creators). That would explain why Van Veen referred to the programming that Facebook is currently looking to pay for as “seed” programming.