Wall Street to Facebook CEO Mark Zuckerberg:
- “You have 2 billion monthly users and immense monetization capability.
- “Your move into video will have big knock-on impacts on producers, channels and others in the video ecosystem.”
- “So tell us: What is Facebook’s video strategy?”
- “Well, I think the answer to that is we don’t know all the answers around what kinds of content are going to work and are not, so we will probably experiment with a number of different things.”
That was the key exchange at FB’s Q3’17 Wall Street Analysts’ Earnings Call last week.
- What does it mean for the Documentary / Unscripted community?
- Earlier this year, we overheard and read about Facebook commissioning documentaries, unscripted series and scripted series, and in the $2-3 million budget per episode range.
- The unscripted projects involved A-List documentary producers, directors and talent.
- My concern at the time was that there’s nothing “unique” about FB competing for A-List talent with subscription services like Netflix, and that this strategy was a puzzle.
- However, FB does want to keep viewers coming back and maximising “TSV” (Time Spent Viewing), as opposed to relying on one-off viral hits that are mostly short-form.
- Commissioned premium shows give FB the ability to extend viewing, and in an editorial process that they control.
- Facebook has already renewed the 8-episode docuseries Ball In The Family produced by Bunim-Murray Productions, and Mike Rowe’s unscripted Returning the Favor.
- Other fully funded projects, dubbed by insiders as “hero” shows, include a teen drama exec produced by Kerry Washington, and “premium shortform and midform series.”
- Lately, the overall licensing conversation seems to have shifted from features and specials to short-form series.
- FB’s aim is to “over-deliver on emotion” to ignite conversations across FB’s communities, and these in turn drive advertising revenues.
- Facebook’s terms are for a brief exclusive window, e.g.,12-months.
- But even these short-form commissions will be rolled out as a series of “mini test-markets” of genres and formats, rather than as Phase 1 in a long-term genre strategy.
Community Experience Strategy
Zuckerberg wants to focus on using video to extend the core Facebook community experience:
“We want the time people spend on Facebook to encourage meaningful social interaction. So we’re going to focus our products on all the ways to build community around the videos that people share and watch. That’s something Facebook can uniquely do.” Mark Zuckerberg
Contributed Video vs Licensed Programs
- Like YouTube, Facebook will rely heavily on contributed video rather than owned or licensed content.
- According to Zuckerberg, “The business here will primarily be through revenue shares of videos that normal creators and businesses put into the system rather than ones that we proactively go out and license ourselves.”
Take Mark Zuckerberg at his word:
- Watch out for a “test market” approach where Facebook tries lots of combinations of communities, genres, formats, revenue models and sourcing strategies to achieve the highest ROI from video.
- This provides countless opportunities for producers, distributors and brands to get into a conversation with Facebook.
But not a lifesaver:
- Don’t expect Facebook to become the lifesaver for a factual production community that is being squeezed by budget cuts in the channels’ programming budgets. Those cuts are driven by cord-shaving and cord-cutting on cable / satellite systems.
- The short-fall in total program spending by the channels is not being filled today by commissions from SVOD services like Netflix and Amazon.
- And it won’t be filled tomorrow when Facebook establishes through trial and error its own unique, community-based, online video economy.
- For more insight, read Will Richmond’s analysis in the indispensible and free newsletter VideoNuze.