It might sound obvious to say that we live in a world where time and data
have because just as or even more important to businesses than their bottom
line but looking at Facebook’s recent moves to offer publishers and video
content creators a share of ad revenue derived from their content and the rumors
of the social media giant talking to record labels about video content, it’s
clear that Facebook has taken this observation to heart more than most.
Facebook plan to get content creators on side is obvious as Facebook makes
its money off the time and information their users spend and share on their
site and partnering with publishers and video creators to post content on their
site directly helps Facebook sell its ad inventory to advertisers as their users
spend and share more time and information on consuming the content they love.
Facebook’s strategy puts them in direct competition with YouTube, who are
owned by Facebook’s real competitor, Google. It’s long been predicted that
Facebook would at some point go up against YouTube but it’s a lopsided match up
as Facebook has the huge advantage of not being as dependent on content
creators as YouTube is as Facebook users engage with other as well the content.
YouTube does have a comment section but it’s notoriously hostile and troll
friendly.
Entrepreneur and investor Jason Calacanis was one of the few who saw this
coming and right now must be rejoicing that Facebook is wooing content creators.
Calacanis has been a long standing critic of the Google owned company’s
attitude towards content creators from its revenue stunting 55/45 split to its
tendency to favor its own key metrics over the key metrics of content creators.
Calacanis has also been particularly critical of YouTube’s reliance on Google
regarding attracting advertisers and because of this, content creators are hit
with the double whammy of having no real relationship with either advertisers
or consumers as according to Calacanis ““You don’t own your customers. YouTube
does,””[1].
While Facebook are offering video creators the same 55/45 split YouTube is
offering, Facebook can offer more money despite the split to due to their reach.
Facebook could offer a better user experience and make videos easier to find as
according to Re/code “People don’t have to hunt to find your video — Facebook
will show it to them. And those people don’t need to be following your Facebook
Page, either”[2].
With its deal with HBO, it’s only a matter of time before Facebook make
deals other cable and broadcast networks that see the promise of exposing their
content to the company’s 4 billion a day audience.
In sum, if YouTube executives aren’t scrambling their brains attempting to
come up with ways to compete with Facebook, it better start brainstorming and
quickly as Facebook are clearly coming for blood.
[1] Quote by E. Vlessing, 2013, Inside.com’s Jason Calacanis On Why He Turned Down YouTube
Funding, http://www.hollywoodreporter.com/news/insidecoms-jason-calacanis-why-he-562700
[2]
K. Wagner, 2015, YouTube Beware: Facebook Will Start Sharing Ad Revenue With Video
Creators, http://recode.net/2015/07/01/youtube-beware-facebook-will-start-sharing-ad-revenue-with-video-creators/
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