Facbook will statrt TV advertising market in its sights,the creation of video series that will begin to appear on the world’s largest social network later this year.
Facebook is closing deals for its first batch of shows, including two that the Hollywood Reporter unveiled earlier this week — reality competition series Last State Standing and a second season of comedy Loosely Exactly Nicole, which first appeared on MTV. The shows will be available via a new video tab on Facebook that hasn’t been released.
Facebook isn’t trying to compete with the highest end of that market — paid services Netflix, HBO and Showtime. It has its sights set on cable networks and advertising-supported online services with young viewers.
“Funding video is a way for Facebook to figure out its greater advertising program,” said Matthew Segal, chief executive officer of ATTN, a digital media company that publishes video to Facebook. “It’s clear they want to be a bigger player in the space; they want to eclipse TV.”
Facebook’s interest in funding video tantalises Hollywood, where producers drool at the thought of another deep-pocketed patron alongside fellow tech giants Amazon.com Inc, Apple Inc and Alphabet Inc. Other new players, like Verizon Communications Inc, have had a harder time, often committing less money to less ambitious shows.
With two billion people checking their news feed every month, Facebook reaches more people than any TV network. “Not only do nearly 100 per cent of people under 35 have an account, but they are spending over 1,000 minutes a month on Facebook,” said ATTN’s Segal.
Facebook is also developing a second tab that will be devoted to the more high-end programming, the people said. Facebook prefers not to put details of the video product in writing and will only discuss it by phone, according to people who have dealt with the company. Facebook has also rankled some potential partners by insisting on selling advertising itself and inserting ads into the middle of live broadcasts, the people said.
Facebook has a small staff handling original programming, not enough to manage a robust operation. Facebook would rather share money from advertising sales than pay for content in the long term.
“The sustainable model is some sort of revenue sharing,” Fidji Simo, Facebook’s head of video product, said in an interview. “The goal is really to get a lot of different partners to come to Facebook share their content and find success. It’s very hard to find that over the long-term by funding.”