Deals

Facebook’s Original Programming Plans Take Shape

Facebook last week signed agreements with several content firms — among them Vox, Buzzfeed, ATTN and Group Nine Media, according to reports. The deals are widely viewed as part of the company’s strategy to attract millennials to its live-streaming Web content.

Facebook will offer multi-tiered programming, according to Reuters, which broke the story last week, citing sources familiar with the plans. The service is expected to include Facebook’s own scripted original shows, which will run up to 30 minutes, as well other companies’ shorter videos, running up to 10 minutes.

The media firms that reportedly have signed with Facebook all target millennials, who are considered the most likely to avoid traditional cable contracts and who get much of their news, entertainment and other information via mobile devices and social media.

Vox is a millennial-focused news site cofounded by Ezra Klein. BuzzFeed is a news site led by former Huffington Post cofounder Jonah Peretti. NowThis and ATTN also are digital news outlets. Group Nine Media owns Thrillist, a restaurant, bar and nightlife blog. The Dodo is a site dedicated to animal-related stories. Seeker focuses on science and exploration.

Facebook’s agreements follow an evolving series of content initiatives announced by competitors:

  • Snapchat’s original content deal inked with Discovery Communications earlier this year;
  • Twitter’s plans for streaming news, sports and original entertainment; and
  • YouTube’s original streaming video content plans, plus recent live-streaming deals with major cable and network television providers.

Twitter earlier this month announced a deal involving a dozen content companies, including a streaming news channel with Bloomberg, a deal with Buzzfeed for a morning news show called “MorningFeed,” and streaming sports deals with Derek Jeter’s Players Tribune and the WNBA.

Facebook recently announced a deal to live-stream weekly games from Major League Baseball for 20 weeks.

New Blood

Facebook earlier this year hired a new head of development — Mina Lefevre, a former MTV executive vice president — to help lead its expansion into original video programming. She will be working under Ricky Van Veen, the cofounder of IAC’s CollegeHumor, who joined Facebook last year as its new head of global creative strategy.

Facebook has openly discussed expanding its capabilities with long-form video as a way to increase user engagement. During the company’s first-quarter conference call with securities analysts earlier this month, CFO David Wehner said the company was considering an investment that would kick-start “an ecosystem for longer form content,” which would involve working with content providers to provide the programming.

Shared Wealth

Facebook will pay up to US$250,000 for the longer-scripted shows, which it will own, according to last week’s Reuters report. For the shorter shows, Facebook will pay between $10,000 and $35,000, and will allow creators to keep 55 percent of the advertising revenue.

“For right now, Facebook wants more video — some of it real news, some of it at least vaguely newsy — and will pay providers something for it,” observed Rick Edmonds, business analyst for media studies at Poynter.

“Over time, this could grow into a streaming channel,” he told the E-Commerce Times.

Changing Landscape

“We are watching Facebook move into the video space,” said telecom analyst Jeff Kagan.

“They have a large number of users, and to see continued growth they must continue to push the envelope,” he told the E-Commerce Times.

Facebook is competing with a wide variety of companies — including mobile phone providers and cable television companies like Comcast and Charter — to get content in front of viewers, Kagan said, because they are eager to sell advertising as consumers spend more time on mobile devices and social media, and less on traditional televisions and print media.

Facebook’s original programming deal reflects “the need to both retain user engagement and create additional revenue streams as their installed user-based increases their dwell-time on Facebook’s messaging apps,” suggested Tim Mulligan, a senior analyst at Midia Research.

The effort “is a response to dwindling user engagement among younger audiences,” he told the E-Commerce Times. “Creating additional revenue streams is a response to their inability to replicate their ad revenue strategy through their messaging apps.”

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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