Facebook Spends $50 Million to 140 Media Companies and Celebrities for Live Video

Facebook is betting big on Live Video, its new live broadcasting tool, spending more than $50 million to entice 140 or so media companies,

Subscription News: Facebook Spends $50 Million to 140 Media Companies and Celebrities for Live Video

Source: Facebook

Facebook is betting big on Live Video, its new live broadcasting tool, spending more than $50 million to entice 140 or so media companies, pro athletes and celebrities to create live video streams to share on the social media network, said the Wall Street Journal. Why? To cash in on potential advertising opportunities that Live Video might generate by further engaging Facebook’s audience of 1.65 billion monthly users.

Citing access to an internal Facebook document, the Journal said Facebook has inked deals with media organizations including CNN, the New York Times, Vox Media, Al Jazeera, Tastemade, Mashable and Huffington Post. In addition, Facebook is working with celebrities including Kevin Hart, Gordon Ramsay, Deepak Chopra, Michael Phelps and Seattle Seahawks quarterback Russell Wilson. Some of the deals are worth more than $1 million each, with BuzzFeed the highest paid at $3.05 million for Live Videos created between March 2016 and March 2017, said the Journal.

For those not familiar with Facebook Live, Live was launched in December 2015 on iOS and in February 2016 on Android. Live allows all Facebook Pages and profiles to share live video with their fans, followers and friends on Facebook. It is currently available on Facebook for iOS, Android and Facebook Mentions, a mobile app for video sharing.

Videos, which can be up to 90 minutes long, are broadcast live on Facebook and then saved to be watched later. While the video is being broadcast, a red icon appears in the top left-hand corner of the video with the word “Live” written next to it, along with the number of current viewers. Like other posts, the producer of the video can delete the video at any time.

Subscription News: Facebook Spends $50 Million to 140 Media Companies and Celebrities for Live Video

Source: Facebook

Live videos can be discovered through Facebook users’ News Feeds, or by tapping “Live Subscribe” at the top of a live video. By subscribing to Live videos for an individual, media organization or celebrity, the subscriber will be notified when that person or brand creates another live video. Facebook also recommends that Live creators let their fans know ahead of time when they plan to broadcast.

In March, Facebook said “we recently made a small update to News Feed so that Facebook Live videos are more likely to appear higher in News Feed when those videos are actually live, compared to after they are no longer live.” At that time, Facebook said it did not expect that Pages would see significant changes as a result. Blog posts by Facebook yesterday indicate that will be changing.

In a post by engineering director Lars Backstrom, Facebook’s top priority is connecting users to their friends. That means posts by friends will be moving up higher in Facebook users’ News Feeds. Backstrom wrote, “Overall, we anticipate that this update may cause reach and referral traffic to decline for some Pages…we encourage Pages to post things that their audience are likely to share with their friends.”

In a related post yesterday by Adam Mosseri, vice president of product management, News Feed, Mosseri said friends and family come first. He wrote, “We are not in the business of picking which issues the world should read about…we don’t favor specific kinds of sources – or ideas. Our aim is to deliver the types of stories we’ve gotten feedback that an individual person most wants to see…when people see content they are interested in, they are more likely to spend time on News Feed and enjoy their experience.”

Media analyst Mathew Ingram, who writes for Fortune, said the “latest tweak sounds like impending doom.” According to Ingram, over the last few months, media outlets have already complained about traffic declines as high as 40 percent compared to last year. Facebook has not explained how Facebook Live and its paid Live creators will be impacted by the latest updates to the mysterious News Feed algorithm.

In addition to create advertising revenue opportunities for Facebook, these lucrative deals may help Mark Zuckerberg’s company compete head-to-head with YouTube, which is still the live video streaming giant. YouTube has more than 1 billion active users – nearly one-third of all people on the internet – watching hundreds of millions of hours of video every day. Facebook’s user base, on the other hand, watches about 100 million hours of video daily in News Feeds.

YouTube and Facebook aren’t the only platforms capitalizing on social video to reach their target audiences. Snapchat, YouNow, Periscope and now Tumblr already have or are jumping on the video bandwagon. There will be more.

Insider Take:

We love innovation in any form, but particularly for subscription companies, including publishers and brands, who can benefit from new ways to reach their intended audiences. Facebook Live is another way for companies to develop and engage those audiences and potentially build alternate revenue streams through advertising and a revenue share opportunity with Facebook to create a sustainable, financial future.

While the full potential of Facebook Live has yet to be realized, they are rolling out the product incrementally, allowing them to fine-tune it. This best practice is recommended for all subscription and membership-based companies. The product doesn’t have to be perfect to be launched. It can evolve over time as parties on all sides of the relationship work out the kinks.

We’re cautiously optimistic to see how Facebook Live evolves, which publishers, celebrities and brands take advantage of the power of live video streaming, and how Facebook eventually monetizes the product to recoup its investment and rewards those who help make it a popular and engaging tool.

Our skepticism stems from how the updated News Feed algorithm actually impacts Facebook Live traffic. If it Facebook puts friends and family first, perhaps its $50 million investment isn’t wise. We’ll be waiting to see what publishers, brands and subscription companies say about their video traffic.

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