It has emerged that Facebook is writing some significant cheques to content creators. No not for advertising royalty share – for content creation.
Yes that Facebook. The one with 1.65bn monthly users. The one with all the distribution power. Paying for people to produce content. Fair? Yes. Surprising? Yes again.
The leaked information provided to the Wall Street Journal shows Facebook is paying US$50m to 140 media companies and celebrities to produce exclusive video content for its Facebook Live platform.
17 of the contracts are worth more thn $US1m with the top payers being Buzzfeed (US$3.1m), New York Times (US$3.0m), CNN (US$2.5m) and Huffington Post (US1.6m). Mark Zuckerberg has talked often about Facebook’s shift to video content – at a Town Hall Q&A in late 2014 he said:
“Five years ago most of Facebook was text, and if you fast-forward five years, probably most of it is going to be video, just because it’s getting easier to capture video and the moments of your life and share it”.
Clearly the company believes Live is a key element in this; Facebook’s own research shows that, on average, users spend 3 times as long watching live videos as other forms of video.
Facebook’s algorithm is always a clue as to the type of content the company wants users to focus on; currently when users currently go Live a notification is being sent to their Facebook fans and live video is given preferential ranking in the news feed. I would imagine the content producers being paid as part of this deal will be given preferential treatment in terms of distribution.
Facebook has long had an eye on the video advertising market historically dominated by YouTube (in late 2015 it announced it had more than 8 billion video views per day). This deal is the clearest sign yet about how serious it is about building a footprint in live streaming. After years of (at best) sharing advertising revenue with partners, a direct content production payment is an interesting precedent to set. Facebook may yet change the rules – it often does – so there is no certainly such payments will continue once it establishes an advertising model for Facebook Live. But the fact the even the 800lb gorilla of social media is paying for content shows the ongoing tension between audience amalgamation/distribution and content creation quality.
Facebook got to where it is today on the back of our content. It has never paid before to any serious extent (unless my cheque from Mark Z got lost in the post). A very interesting move. And not one which Periscope or YouTube wanted to see.