Facebook is reportedly developing an OTT app for TV set-top boxes, including Apple TV, the Wall St Journal reported earlier this week. The news of a TV app fits with a variety of other recent news stories about Facebook’s ‘video-first’ strategy, all of which point to a focus on improving content quality and lengthening engagement times. For example, the social giant has already been holding discussions with media companies about the possibility of licensing broadcast-quality long-form content. Then on the product side, we have also seen Facebook introduce mid-roll ads for live videos, and the recent announcement that longer videos will be given a heavier weighting in the News Feed, provided those videos have a high completion rate.
The move into TV is a logical next step for a company with Facebook’s data at its disposal, the TV strategy is all likeilhood being fast-tracked to solve three key strategic challenges for Facebook: growth, quality and discovery.
Last night Facebook posted another set of stellar results, reporting quarterly profit of $3.57 billion for Q4 2016, more than double the $1.56 billion it reported a year ago. However, Facebook still needs to find fresh new pastures quickly if it is to keep growing. Last November, Facebook CFO Dave Wehner said on an earnings call that the company was close to maxing out their News Feed inventory. “Over the past two years we have averaged about 50 percent revenue growth in advertising. Ad load has been one of the three primary factors fuelling that growth,” he said. “With a much smaller contribution from this factor going forward, we expect to see ad revenue growth rates come down meaningfully.” Limited to the confines of its own walled garden, Facebook has to generate inventory elsewhere, so taking a slice of the $175 billion TV advertising market is an obvious next step.
2. Quality & Brand Safety
Offering live streaming to the public is always going to come with risks, but they might be the type of risks that many brands will be keen to avoid for fear of being caught up in a tragic news story. Sadly it feels like barely a week goes by without another story of how a young person has live streamed their suicide. Then there have been a number of murders and a violent kidnapping streamed live on Facebook, whilst terrorists have also taken to the platform to call for jihad after committing terrorist acts. Whilst all of the above might be the inevitable by-product of having user-generated live content, that doesn’t negate the risks to brands who don’t want to become the story themselves.
Whilst live video has undoubtedly been hugely successful for Facebook, the results have been less impressive for publisher partners. For example, at the time of writing, just over two thousand viewers were viewing Channel 4 News’s live feed of the today’s Brexit debate in the House of Commons, which is one of the leading headline stories of the day. Even though Channel 4 News’s page has been liked by over 3.2 million Facebook users and is one of the most established media brands in the UK, the numbers are still tiny in comparison to what can be achieved on TV.
And if the likes of Channel 4 are struggling to generate large audiences on Facebook, it suggests that Facebook has a discovery problem.
Users can currently access video on Facebook in the following ways:
(a) via the News Feed, the video content of which is determined by advertisers and by pages the user has liked;
(b) by searching for a publisher’s page on Facebook, which is in all likelihood an insignificant generator of traffic for publishers;
(c) by viewing Facebook’s live video map;
(d) by responding to a push notification.
All four have their limitations. Take the News Feed. The average Facebook user will already find their Facebook feed is already cluttered with ads, publisher content and posts from their friends and family, so there’s already a lot of competition on there for eyeballs. Then, even if a user does decide to click on live video, few of those are likely to be in the ‘lean-back mode’ associated with long-form content. To achieve that at scale, you need TV…
Facebook pages aren’t much use for live video either, and generally speaking they are where users go to’ like’ a page, rather than to discover content, as if the user is interested in a page they will typically want that publisher’s content pushed to their News Feed.
Users can also find live video content via Facebook’s Live Video map, although the user experience makes it feel more like a one-way chat roulette conversation. Click on one part of the map you’re watching a national broadcaster, and click on another part and you can find yourself viewing an empty chair as the person streaming from their bedroom has left to go to the toilet. It is next to impossible to find anything interesting and feels far from a premium experience.
Which leaves the push notifications, which on the face of it would be the type of thing that would be hailed at industry conferences as the way content will be consumed in the future i.e. the right person being told to watch the right content at the right time.
But in reality the experience of having yet another notification on your phone is far from an enriching experience. And if the reactions on Twitter are anything to go by, people really aren’t taking kindly to Facebook’s notifications:
facebook live video notifications are worse than being at the mercy of a phone. “Stop what you’re doing right now and watch me” really?
— jana_kaye (@jana_kaye) January 12, 2017
so bored of getting facebook live notifications from stupid lads and their ‘sick 30 min d&b mix’ on their new xmas toy ?
— Luce (@_luceeeee__) January 11, 2017
Whilst TV apps have their limitations when it comes to discovery, their simplicity is the secret of their success, marking it far easier to steer the viewer towards quality content without having to content with masses of amateur UGC.