Dive Brief:
- Facebook plans to expand Watch, its tab for premium video launched in August last year, to court more individual content creators, CNBC said in a report citing multiple unnamed sources familiar with the matter.
- Instead of only buying the rights to shows for Watch, Facebook would set up a system where creators could upload their videos for free and earn part of the ad revenue in a manner similar to Google's YouTube. Facebook's goal is to create "a sustainable ad-supported video platform, where it won't have to pay for the majority of content," sources told CNBC.
- Facebook currently pays for rights to Watch shows, ranging from $10,000 to $500,000 per episode, and not every one makes ad revenue. The service features offerings like the "Comeback Kids" by The Dodo and "Struggle Meals," focusing on cooking meals for under $2. In December, Facebook announced that it will add pre-roll ad breaks before videos and require videos to be at least three minutes long to have mid-roll ad breaks.
Dive Insight:
When Watch launched last year, it was seen as Facebook's long-awaited answer to YouTube, but with a platform that was different than Google's in being largely built on TV-like content from publishers and entertainment brands. However, Watch has struggled to win over users, with many views reportedly coming in from the News Feed as opposed to the tab itself. Marketers are also reluctant to advertise on Watch because the content categories are broad, raising concerns about where ads wind up, per CNBC. The recent news, if confirmed, would show Facebook making a significant pivot with its Watch strategy, cribbing directly from the YouTube model to put control in the hands of creators who would be able to upload videos for free and then earn a share of the revenue from them as people tune in.
This shift would come at a strategic time, as YouTube has an increasingly contentious relationship with those who share video on its platform. Several instances of ads appearing next to unsavory content and top YouTube influencers becoming embroiled in controversy have prompted parent company Google to introduce more stringent criteria for which channels can be monetized. The tougher ad guidelines have impacted the livelihood of many YouTube creators, some of whom have lost as much as 80% of their monthly revenue, raising the question of whether they will migrate to other platforms like Amazon's Twitch and potentially Facebook.
If Facebook can court creators who feel estranged from YouTube, it might be able to address how users are spending far less time on its site — a trend that's not expected to slow down amid larger changes to the platform. Facebook at the beginning of the year announced a major update to its News Feed algorithm that diminishes the reach of organic posts from publishers and brands in favor of personal content from friends and family, and that has so far reduced the amount of time spend on the site by 50 million hours per day, according to CNBC. However, some marketers are becoming more bullish on Facebook influencer marketing in the wake of the algorithm adjustment, as posts from independent creators more closely resemble user posts than those of businesses and media entities.
