Skip to content

Facebook Originals Are Coming! Update: What Will They Pay?

2017 May 8
by Peter Hamilton

Facebook aims to launch its slate of commissioned programs next month.

There are two buckets for the 24+/- greenlights to date:

  • Signature, bigger budget programs
  • “Shorter, less expensive shows of about 5- 10 minutes that would refresh every 24 hours.”

Reporters Nathan McAlone and Alex Heath uncovered some of the mystery of Facebook video in Business Insider, where you can read their full report.

What Will They Pay?

  • Reuters later reported that Facebook will pay up to $250,000 for each episode of its longer, scripted shows.
  • It will pay somewhere between $10,000 and $35,000 for its shorter second-tier unscripted programming.

Ad Rev Share

  • According to Reuters, with Facebook set to run ad breaks in both short and long form content, content creators will be offered a 55% share of ad revenue.

Defense

The move is partly defensive:

  • The Facebook brand has been hammered by Live suicides and worse.
  • Facebook was taught a costly lesson on why networks don’t give up control over their video content to outsiders.

Offense

And it’s mainly strategic:

  • Facebook is responding to its online competitors Amazon and YouTube, who enjoy a huge lead in creating original video.
  • Snapchat has emerged as a Facebook competitor with its younger, hipper and more video-friendly audience.
  • And to maintain its astronomical revenue growth (and share price), Facebook must grab advertising budgets from Linear TV.
  • Monetization of originals will be via mid-roll ads, placed in the middle of the video.

The Big “Non-Question”

  • Armchair analysts ask: “Will its 1.2+ billion active daily users see Facebook as a destination for original video?”
  • But at its gigantic scale, Facebook will rock the video world if as few as 1% (12 million) of its engaged audience becomes regular viewers of Facebook originals.

Best Friend for Video

Genres

  • Business Insider cites dramas like “House of Cards” as the top priority for FB.
  • A-List celebs matter.
  • Teen-targeted content is a priority to compete with Snap.
  • And there’s a Conde Nast VR dating show.
  • Sports is in the mix, with talks reported with Major League Baseball.

Factual

  • Documentaries aren’t cited in the Business Insider report.
  • But we know that Facebook has a team that addresses original Factual content.

Looking Ahead

  • These are all baby steps for Facebook.
  • Through trial and error, the social media giant (Market Cap: US$433 Bn) will refine its development and delivery strategies.
  • It is inevitable that Facebook will expand its content offering to include multiple Factual sub-genres and formats.
    • Cab / Sat operators started with Scripted Entertainment, porn, Sports, Kids, News and Music.
    • Then they moved on to Factual, Lifestyle + documentary niches. (Discovery)
  • That’s how Cable / Satellite distributors grabbed a big share of U.S. network advertising from the broadcast networks.
  • But unlike scheduled networks which are anchored to on-the-hour schedules, FB can elect to create content at lengths that are proven to work best for its viewers.

Big Takeaways

  • Here comes Facebook!
  • FB is in the “test and go-with-successes” business.
  • So one certain Takeaway: FB’s video strategy will evolve at a cracking pace based on responses from the Friends.

Leave a Reply

Note: You may use basic HTML in your comments. Your email address will not be published.

Subscribe to this comment feed via RSS