Friday, March 09, 2018

Facebook Watch: experimenting the best way to monetization

Last August, Facebook launched Watch, a new page for original shows from content partners. The plan was to have everyone able to upload video series onto Facebook. The long-term plan is that Facebook no longer fund the majority of Watch programming. Apparently, it's a long way to go - monetization and quality control is the trade-off they are facing.

Disappointed by the overall quality of Watch videos, Facebook is reassessing its plan. Mid-roll ads were the major revenue source for long videos. Facebook used to have strict requirement on video length: videos need to be at least three minutes long to run mid-roll ads, and ad breaks can’t appear until a minute into the video.

While Facebook is less committed to this requirement right now, I hope it finds its own way to differentiate Watch from Youtube and other video platforms. There are several competitive advantages for Facebook, in my opinion:

  1. Sticky users. Compared to several years ago when we go on FB to stalk people's life or connect with friends, Facebook users are now spending much more time on videos rather than viewing pictures from friends. There is huge opportunity for FB to monetize on that amount of incremental time.
  2. Customer flexibility over content. If Youtube pushes something random to you, either in the middle or after a video clip, you might feel very annoyed. Users tend to expect very relevant content to be pushed by the Google-supported programming. FB users have different mindset - they are usually seeking leisure and will generally be pleasantly surprised by new content. They enjoy the variety of content that are linked together. If the programming makes the content too relevant, they might find them homogenous and leave the platform.

Based on the user habits, FB is right in vetting the videos and be cautious when monetizing on Watch. 

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