We’re seeing more and more tech companies trying new things to sway audiences and ad dollars from traditional TV, and Facebook is the latest making significant moves on that front. The social network recently announced a deal to stream 20 live MLB games this year, and now they’re boosting their sports presence in a couple of other areas, targeting sports as one of six key genres where they’re paying content companies (including SB Nation parent Vox Media) to create shows exclusive to Facebook (at least at first) and bringing in ad tools to let other big media companies (including ESPN) directly sell ad inventory to marketers looking to reach consumers targeted with Facebook data.
The original shows are interesting, and they go well beyond sports. There are a lot of big-name publishers involved, including Vox, BuzzFeed, Condé Nast, Mashable, Refinery29, Attn and Group Nine Media. Here’s more from Digiday’s Sahil Patel on how this will work:
Since the end of last year, Facebook has been on the hunt for entertainment content, which it would fund and distribute on a redesigned video tab on its mobile app. Facebook is looking at funding shows in two tiers: original shows, which it calls “hero” units, which would be 20- to 30-minute scripted and unscripted shows that Facebook would fully own; and “spotlight” shows, which would be shorter, four- to 10-minute formats, but not owned by Facebook.
Facebook is also looking at six broad genres, including science, sports, pop culture, lifestyle, gaming and teens. (One thing Facebook is not focused on is hard news programming, which has rubbed some news publishers the wrong way.) Budgets for Facebook originals are in the $250,000-per-episode range, which puts them in the low-end cable TV range, sources said. On the other hand, budgets for spotlight shows sit between $10,000 and $40,000 per episode, sources said.
Most of Facebook’s deals for video shows are within the spotlight program. The partner companies have sold multiple shows to Facebook for spotlight, which will retain exclusivity on those shows for only a certain period of time. According to sources, spotlight shows are exclusive to Facebook for seven days, after which the content owner is free to distribute it on their own sites and apps. Two weeks after the Facebook premiere, spotlight shows can go to YouTube and other social platforms, sources said.
Patel adds that there will be less “hero” (exclusive to Facebook, and fully owned by them) units than “spotlight” ones, and that for those “hero” units Facebook “is in talks with and is buying shows from bigger TV production companies and networks, as well as some of the top digital publishers on its platform.” Given that sports is an area of emphasis here, it wouldn’t be surprising to see some connections to other sports entities (networks, digital companies, etc) pop up.
Those “spotlight” shows would seem to be a fit for sports, too. In particular, it’s easy to see Vox doing 4-10 minute video shows for Facebook through SB Nation. (We don’t know that SB Nation’s involved, and this could be about Vox’s other properties as well or instead, but they would seem to be a logical fit.) As Patel noted, this has the potential to work for both sides; Facebook will fund the costs of the content, recoup that cost by selling ads during the shows, and then split further ad revenue with the creators (taking a 45 per cent cut), and the creators get content paid for by someone else, potential profit on top of that as well, and the ability to use this on their own sites and other social platforms eventually.
The ad tools deal is also notable, and that’s where ESPN is involved. From Garrett Sloane at Advertising Age, here are more details:
Facebook is opening up its data for streaming video publishers to target video ads on their sites and in their apps.
A&E Networks, ESPN, Hearst Television and Scripps Networks Interactive are testing an automated system that lets marketers find their intended audience using Facebook data such as age, gender and location.
“It’s a new tool that allows publishers to sell their ad space directly to advertisers using Facebook’s ‘people-based’ system,” said Brian Boland, VP of publisher solutions at Facebook.
The program, called Audience Direct, is a fundamentally new way for Facebook to help media partners sell their ads. It gives publishers the power to sell their own ad inventory directly to advertisers, keeping their own ad tech infrastructure in place.
…The direct sales let the publisher set up the deal, and the programmatic part automates the execution. Facebook claims its data helps target ads with 90% accuracy compared to 50% to 60% at other networks. Higher accuracy means publishers waste less inventory serving ads to the wrong person. And Facebook’s massive volume of data on logged-in consumers certainly has an advantage over systems that rely on cookies and other methods to infer consumers’ characteristics.
Sloane notes that Facebook isn’t directly making money off this beta test, but hopes for eventual revenue from transaction fees and other sources, and that it’s also trying to bring media partners closer (in competition with Google/YouTube) and find more ways to keep its platform as a focus for them. This is on the other side from paying publishers to create shows, but it’s with a similar goal of getting and keeping publishers’ content on their platform, and finding different ways to make that work for publishers.
In some ways, these moves are maybe further proof of why the company has been reluctant to jump full-bore into streaming rights, with company CEO Mark Zuckerberg (seen above) recently talking about how their focus is making the video tab a content anchor, but eventually not paying for rights and instead making money through revenue-sharing on ads (as with these “spotlight” programs). The MLB deal fits there, too; it’s not a massive amount of games (and thus, presumably not all that expensive), but it’s something that could get people to check out Facebook’s videos and get in a pattern of going there. And Sloane’s article notes that the overall goal is to try and expand video in a way that takes advertising dollars out of the pool currently spent on TV.
These moves to work with publishers figure in there, too; if Facebook is commissioning videos from the likes of SB Nation and offering the likes of ESPN targeted user data and the ability to sell directly to advertisers, that’s going to create more and more sports video on their platform. We’ll see how this all pans out, but it’s an interesting strategy from the company, not going just for live sports rights on their own but rather finding different ways to incentivize other publishers to put video content on Facebook.