Just when you thought the battle of the five kings was all but done and everyone had claimed their own Kingdom, it has reared to life. No, not Game of Thrones. The battle for your video-watching eyeballs being waged among Netflix, Amazon, Google, Apple (recently), and in the very near future… Facebook.
Facebook last week announced it is launching Facebook Watch. A thoroughly underwhelming selection of content beamed onto your device of choice via a new tab. This new tab has helpful sections aimed at reducing the amount of time you scroll, scroll, endlessly goddam scroll through Netflix when your last binge show has finished.
Unlike Netflix, however, you will not need to pay a monthly subscription. And (initially at least) you won’t get to see anything you actually want to watch. The “Nas Daily” show they have touted is not about QBC’s finest, Nasty Nas Escobar.
So are we excited? Are we worried? Will the other Four Kings care? Yes, no, and they should. Netflix is currently in a $20 Billion debt and liabilities hole. That is worse than Pandora and SoundCloud combined. That is iHeartRadio levels of terrible.
Standing by itself, a bunch of shitty content streamed through a social network won’t blow anyone’s socks off. But when you add in a few of the other layers that Facebook has at its disposal, things get interesting.
Google aside, the other Kings of Content all make money from subscriptions. Google, via YouTube, makes a handful of pennies from pre-rolls. It also doesn’t waste (much) time trying to make original content. It is happy to let other creators take that risk, and any money the content might make from advertising revenue is split via some extremely secret algorithm with said creator.
This will be Facebook’s model and has already proved very profitable for the company when targeted ads are thrown in the amid all the photos of my cat and dog that I post. However, Facebook has already been rolling out that annoying “Your video will resume in X seconds” ad placement inside Newsfeed videos. If this was placed in the middle of a video I actually wanted to see, I would stick around. And if the video was a 30-minute episode of my latest binge, I would expect to have several, of these ads thrown in every 8-10 minutes, the same way terrestrial TV does now.
Facebook’s programmatic advertising within content I want to watch will be a very effective and highly measurable way for advertisers to reach eyeballs – all without Facebook having to pay for the content it is distributing.
When you add the social layer onto this, which will allow all of us humans (who have our avocados, clothes, books etc delivered and try to avoid leaving the house) the opportunity to easily banter along with friends or internet strangers about the show we are enjoying ‘apartogether’. Just like Twitch. Or Justin.TV if you ever streamed Family Guy on that service.
But hold on. There's More!
As part of the rollout of Facebook Watch, The Zuck has said that all advertising revenue will be split with “content creators” 55/45. Personally, I think this is a little low. Apple only keeps 30 perent of music (content) revenue from iTunes. That is the benchmark.
Regardless of the level of the split, content creators – or owners/rights holders, a better term - will soon be able upload their content for distribution to Facebook’s audience, and take in a revenue share of the advertising. Why wouldn’t you? Even if you were a baller creator such as… The Project.
Let’s all pretend for a minute that TV ratings are actually valid so we can run some figures. Okay, let’s not. This kind of model doesn’t actually need the numbers to prove its value.
Let’s imagine that we know what age, demographic, life stage… and a hundred other things about every single individual viewer tuned into The Project, and that we can target advertising absolutely specifically to each and every human watching, based on all of this information we know about them.
Suddenly me and my mum are having different ads served to us as we watch the same program in different locations – all the while old mate Barb is calling me a woolly headed lefty via the chat function. Classic mum banter. I get ads for beer, holidays I can’t afford, and Wu Tang Clan cufflinks while she gets ads for…whatever it is a 58-year-old white woman likes. Soft cheeses? I don’t know.
The Project doesn’t even need to sell these ads themselves (soz, sales department at MediaWorks). Or try to tailor their stories to hit a particularly sweet demographic spot. If the eyeballs that tick the advertisers’ boxes are watching, Facebook’s programmatic system will do the rest – and give the owners of The Project a 45 percent cut.
TV advertisers not only still get their desired reach and frequency, but they can set the exact numbers they want to hit for the specific demographics they are chasing. This targeting will make the ads more expensive, but far more accurate and measurable.
So long as the bid price for these far more relevant, accurate, and measurable ads is more than 100/45 x the current rate card value (lol – rate card)) of ads being sold via terrestrial TV, then the people who own The Project are better off not only distributing via Facebook, but encouraging as many of their viewers as possible to jump over to that platform.
As to whether or not the content owners actually do this…time will tell. Is a 45 percent cut enough for professional content creators to see the value? Will they allow non-exclusivity across platforms, allowing the subscription services to show the same shows? Will the suggestion algorithms make for a shit experience and more endless scrolling? Can I mute my mum’s social commentary?
I don’t know. But I am glad to see that the future won’t be entirely focused around me having eleventy different subscriptions just so I can watch Game of Thrones AND Vikings AND American Gods AND and Black Mirror. And the Project. Hopefully.
- Anthony Gardiner is the founder and chief executive of ThePlaylistNetwork.com.