The planned app will reportedly be all video, and could see Facebook insert multiple 30-second ads into its content, depending on a clip’s duration.
From a viewer’s perspective, at this early stage, the venture raises more questions than answers, primarily in regard to the type of video programming the app will provide. The most recent internal rumblings suggest the company has tasked exec Ricky Van Veen (co-founder of comedy website CollegeHumor) to license content and original shows from TV studios and other production outfits. Facebook also recently updated its News Feed to prioritize longer videos with high engagement rates, which was seen by some as an incentive to Pages to create more professional content. These longer videos could also make it on to the app, allowing Facebook and publishers to earn revenue through its recently launched mid-roll ads offering.
Even more critically, the move would see Facebook take on VOD giants Netflix, Amazon Prime, and Hulu (not to mention additional competitors YouTube Red and Twitter), leaving little space for it to differentiate itself from its rivals.
As a commercial tech company — with its fourth quarter earnings report scheduled for Wednesday — Facebook reportedly wants to capitalize on the video advertising revenue such a venture offers. Notably, its previous earnings call in November, sent its stock tumbling on the revelation that it is running out of ad space on its News Feed. A slice of the United States’ $70 billion TV advertising pie would go a long way in solving that issue.
In terms of digital advertising, Facebook is second only to Google thanks to its Audience Network tool, used to create third-party ads for mobile apps and websites. In November, Facebook confirmed that it was also extending the program to Apple TV and Roku apps. For marketers, the major advantage of tapping into the company’s advertising tool are the insights it offers, resulting in targeted ads that are more relevant to users’ interests.
If Facebook decides to stick with a free video app — instead of introducing a subscription-model in the vein of Netflix or Amazon Prime — it could also tie it into a user’s social network account to further cater the advertising experience to their preferences. It’s enough to make businesses hand over their money right away.
