Jan 17, 2017

Winners & losers from Facebook's live video pivot

Recode reports that Facebook may stop paying publishers to make live videos, after dishing out more than $50 million to over 140 publishers in FB Live contracts last year.

Why?:

  • Diminishing ROI: A large international marketing campaign targeted to everyday users could suggest that Facebook sees diminishing returns on investment in paying publishers to create content that everyday users can now create for free.
  • Long-form video pivot: This could be yet another signal by Facebook that it is readying its plans to distribute its long-form content to compete with the likes of Netflix or Amazon. In 2016, the tech giant rolled out a video tab on its platform and said they were exploring "funding some seed video content."

Winners: You. This could be good news for everyday users who are being inundated with live content flooding their streams on numerous social platforms. The push for publishers to create enough Facebook Live content to fulfill contract needs often meant publishing video that wasn't suited for a Facebook Live audience, like hour-long live discussions and panels at events.

Losers: Amazon, Netflix, and TV networks. Facebook's pivot to long-form, professionally-produced could be aimed to gobble audience and advertising dollars from companies that create long-form content, like Amazon, Netflix, and TV networks. For TV networks, the television audience is already accustomed to engaging on Facebook. A new Nielsen study published Tuesday says Facebook users average 3.9 TV-related engagements on Facebook each day. Facebook's head of creative strategy said last year that funding long-form video "takes advantage of mobile and the social interaction unique to Facebook."

Smart take: Expect publishers to pull back live content efforts if a new business model isn't introduced for them to monetize on the platform. As CNN's Executive Vice President Andrew Morse said earlier this month, "It's going to be hard for us to continue to do Facebook Live long-term if we can't figure out how to monetize it, because we're able to monetize our video really well in other places."

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