Live is Facebook’s Next Big Moneymaker
There are experimental projects at Facebook like Paper, Boomerang, Slingshot, and Sports Stadium. And then there are Things Facebook Is Obsessed with and Will Crush Because It’s Business Critical. Examples of these include introducing an algorithmic feed, shifting from mobile web to app, native video, and going all-in on messaging by buying WhatsApp, unbundling Messenger and hiring the CEO of Paypal to run it.
Now, it’s clear that live video is next space Facebook is planning to conquer.
Suddenly, Zuck is espousing the wonders of live video and often broadcasting live himself. Facebook is bidding on NFL rights, and recruiting and paying celebrities to broadcast live. Most telling of all, live video has been prioritized in the news feed.
Why is this happening? Why is Facebook going all-in right now?
First and foremost, people love live video. Facebook users are watching live video for three times longer than recorded video. User experience drives everything at Facebook, and this is of course a data-informed initiative.
But Facebook’s commitment to live is much bigger than simply giving users what they want. Roughly $200 billion is spent globally on TV ads per year. Live is the last bastion of linear TV, the only reason viewers need to tune in anymore. If Facebook can crack live, the ad dollars associated with it may very well dominate the next several years of the company’s revenue growth.
Right now, the most underappreciated Facebook feature is the related videos feed — an algorithmically optimized stream of video, with original and sponsored content. Publishers whose videos are viewed receive a cut of Facebook’s ad revenue from sponsored videos in the feed. Facebook would never adopt the terrible user experience of pre-roll, so unlike the rest of the Internet…it invented a better solution.
Expect the video feed to be the mechanism through which celebrities and publishers monetize live video. Expect Facebook to prioritize the entire video feed.
We’re talking about the best TV guide in the world. You do not search. The videos come to you. Each user gets a data-driven customized video experience. This solves the content curation and discovery problem that exists across both television and the Internet (read: there is way too much content).
When it comes to live video — whether it is a friend, celebrity, or sports league — Facebook’s algorithm is the most valuable tool in the world.
TMZ is live on Facebook from its studio. Local news channels are simulcasting live on Facebook. Pretty much everyone is live on Facebook. It’s not an accident.
With live video, Facebook is ready to reinvent TV and make a great deal of money.
