The battle for video supremacy is heating up, with Facebook declaring the same revshare with original content creators as its arch rival, Google’s YouTube. While the social media giant, unlike YouTube, doesn’t yet offer pre-roll ads, it does have 4 billion video views per day in the last quarter and superior analytics that audiences and advertisers prefer. A clash of titans is clearly on the cards
BY ALIEFYA VAHANVATY
On July 1, 2015, Facebook announced its plans to introduce video ads in its ‘Suggested Video’ feeds and share revenue with content creators – the exact same 55-45 formula that its competitor YouTube currently has in place for its contributors. This move means that YouTube finally has serious competition to its decade-long dominance in the digital video market.
Facebook has some significant built-in advantages - its viewers are all logged in, registered users, which means potentially that Facebook has large deposits of data on them for advertisers to target specific demographics. Also, Facebook has a massive ability to reach people on mobile, and to convert mobile users into revenue streams, as it has amply demonstrated in the past.
Of course, there are a few caveats: Facebook’s modus operandi is all about auto-playing videos; YouTube, on the other hand, is user-initiated. However, that won’t matter if users gravitate to Suggested Videos and advertisers clamour for placements which, given the social media platform’s user base numbers and data mining metrics, may pose a clear and present danger to Google-owned YouTube.
By revving up their video ad offerings, the companies are hoping to earn a share of ad revenue as online video traffic balloons. Cisco predicts that by 2018, video traffic will be 79% of all consumer Internet traffic. Video-on-demand traffic is expected to double by 2018, the equivalent of 6 billion DVDs per month, according to the Cisco Visual Networking Index.
THE SHIFTING VIEW
The online video platforms (OVP) market is relatively young, but its growth rate is exponential. The reason for this is quite obvious. The fact that anybody can put up a video on the Internet - unlike Television or Radio that needs a deep pocketed broadcaster to develop and distribute content - is the biggest game-changer. Add to that an audience that gets bored faster than ever before, and is at the same time lapping up content. With Internet penetration going strong, 4G finally rolling out and smartphones getting cheaper, video content consumption on mobile is only going to get even more aggressive.
According to a report in the Economic Times, Indians today watch close to 5 billion videos every month—almost five times the size of the country’s population. The average time spent watching online videos per user grew by as much as 27% between 2013 and 2014, with an average viewer watching close to 68.7 videos for a total of 431.5 minutes in a month. That is the same amount of time spent by an individual on a daily soap every day of the week for one full month!
YouTube has been a name synonymous with online video content for the past decade. According to industry experts, the monthly reach of YouTube in India is 50-60 million with about 3.5 million unique users visiting YouTube each day. Moreover, YouTube is localized in 61 countries and languages make it a clear favourite among its user base. As per YouTube, 100 hours of videos are uploaded to the website every minute, thereby making it the largest video repository in the online space.
But today, the platform is under serious threat from social media giant, Facebook Inc. With 1.4 billion users, the social media site has become a vital source of traffic for publishers looking to reach an increasingly fragmented audience glued to smartphones. In recent months, Facebook has been gradually upping the ante on its video strategy in order to persuade content creators to host their content within Facebook, rather than making users tap a link to go to an external site. And, to make the proposal more irresistible to publishers, Facebook on July 1 announced the same deal as YouTube ? to make money from advertising that would run alongside the content, with 55% of ad revenue going to the content partners.
In Facebook’s favour, its massive reach has always been a huge attraction for content creators. With its latest move, the social media giant is now making them an offer they can’t refuse – i.e., cash. To advertisers, Facebook’s pitch is that it can get them more eyeballs for their video ads.
Social media marketers are keen to ride the video wave: Nearly 75% plan to incorporate more original videos, and another third plan to increase their use of short-form video content like Vine even as they focus on other website content, according to the 2014 Social Media Marketing Industry Report. “Video is becoming big as far as digital is concerned, and both YouTube and Facebook are upping their strategies. YouTube, for example, it pitting itself against TV. Facebook, on its part, is pursuing new streams of revenue generation. And there is enough and more business for both these to co-exist and still give great value to the advertiser,” says Shamsuddin Jasani, Managing Director, Isobar, Dentsu Aegis Network. So, as the decks stack up against each platform, which one now offers more of a winning proposition?
A key difference between the two platforms is with regard to intent and discovery. Users go to YouTube with the sole purpose of watching videos and to search for them on their own, creating their own personalized viewing experiences. YouTube is widely considered to be the No. 2 search engine in the world and when people find a video on the site, the related videos and the right rail are still the main drivers of discovery once someone is inside. While there are channels and preselected playlists, the beauty of the service is in being able to do your own thing and choose the exact videos you want to see.
Facebook, on the other hand, decides what you watch; it curates videos for its users. The videos show up in the individual’s news feed based on an algorithm which decides what that particular user might want to see. There’s no real way to search for video on the platform: You either watch what is served on your screen or you don’t. If the curation is accurate (which, thanks to its data mining prowess, it is) you’ll stick with them, as it’s a lot easier than sorting through things yourself.
And in this context, its recent call to content creators is a great move for Facebook — more than anything, it will get users thinking of the platform as a video source. “At this point of time, on YouTube you can access premium content. There are many content creators who are producing high-quality, well-shot, well-produced videos which are already very popular. Brands have also started taking this very seriously and are maximizing the popularity of the format to plug their brand story on to the platform and are tying up with content creators such as AIB, TVF, etc. On the other hand, the videos on Facebook at this point, are coming in contextually or virally, on which the brands and consumers have no control. It is all curated by Facebook and individualized for each user based on his or her previous behaviour. And hence, brands have no control over what is being served to a particular Facebook user,” says Ranjoy Dey, Head-Digital, Havas Media.
REACHING THE EYEBALLS
YouTube, as a video-first platform, has over the years built an extensive ecosystem of application partners distributing their creators’ content. YouTube apps are available on nearly any mobile device: inside of Apple TV, Amazon Fire, and so on. There’s also a built-in platform with the Google Chromecast, which pushes YouTube content into the TVs of millions of homes.
This is a spot where Facebook is currently lacking. But with a track record of unbundling its experiences, or removing core features from one app and turning them into multiple apps (Facebook messenger, for example), it’s a possibility that we’ll see some type of Facebook TV app sooner than later. But for this to work, it will be necessary to get users to start thinking of Facebook as a media outlet, not just a social network. That’s easier said than done: Users who have been programmed to check Facebook for a few minutes several times a day to see how many “Likes” their latest selfie got may not take easily to hanging around here to watch “How to…” videos or the latest debate on News Hour. And while the content is still short form (one or two minutes at most) the habit is a new one. It’s going to take some reworking to point people to your brand’s “Facebook Video” page like you can on YouTube, which could be a weakness for the social media platform. Facebook is largely regarded as ‘jack of all multimedia’ as opposed to YouTube’s single focus on video content. So far, as distribution is concerned, while Facebook has the advantage of being socially networked, it’s presently YouTube that has the clear connected device edge. “If you look at the Facebook platform today and go to the search bar, currently there is no video option there – it gives you people or posts or photos, but no video. The moment consumers are able to search their preferred content, the video feed will see its own popularity gaining momentum. Until now, video search was YouTube’s strength and USP. But the social and virality factor of Facebook makes up for its lack of video search. Also more than 65% of Facebook content is viewed on mobile. And therefore, the intuitive content along with the fact that consumers don’t need to leave the Facebook ecosystem to like, comment or share a video is a huge plus point for the social network. All this, in combination, works to make Facebook a much more attractive proposition to marketers and brands. At the end of the day, the consumer’s behaviour will dictate which platform will get the majority of the marketer’s budget,” adds Dey.
PRIME TIME
Years of premium content from hundreds of thousands of independent creators, numerous multi-channel networks (MCNs), major media companies, and even full-length movies and TV shows have become the edifice of YouTube’s vast content library.After all, YouTube was made for video, so its community of creators is already years ahead of Facebook’s generalist social community. And that’s the foundation that Facebook is taking a good shot at. It’s working harder than ever to bring high-quality content into users’ newsfeeds. And its latest move to share ad revenue with content creators is hardly the first by the platform to eat into YouTube’s premium content.
For the second year in a row, Facebook has partnered with HBO to host the live red carpet streaming of the US premiere of the show “Game of Thrones”. It also recently announced that it will be running original programming from MSNBC and other news organizations. With content creators in the driver’s seat more than ever, Facebook will be doubling its efforts to court them and the agencies that represent them with agreeable revenue splits, better analytics, and other tools to build their media brand and publish high-quality content. While YouTube does hold the upper hand in the premium content space presently, but as it is a creators’ marketplace, they will eventually decide which platform gets them more eyeballs. “YouTube has always been a video-only platform and has always focused on content and built a community around it. With Facebook, while the community is currently lacking, you will see a lot of premium content which will surely make its way on to the platform and over a period of time, is going to be a huge differentiator that it can leverage. Quality of content is Facebook’s biggest shortcoming today, which it is addressing very aggressively,” says Dhruva Shetty, Head-Marketing at ad-tech firm Vizury.
WHO’S WATCHING?
According to Facebook’s own numbers in January this year, the number of video posts per user has increased 75% year-on-year globally and the service is already delivering 4 billion videos a day. YouTube, on the other hand, saw unique desktop views decline by 9% year-on-year in September 2014, according to comScore, but it’s still in the region of billions of views per day as stated by the video- sharing platform.
It’s also important to note that Facebook records a view after just three seconds, whereas YouTube records a view somewhere around 30 seconds. (The exact science of YouTube view counts is not disclosed.) But the winning card in this battle could be the type of premium content that Facebook is ramping up with. According to stats shared earlier this year at F8, Facebook’s annual developer conference, 88% of millennials get their news on Facebook; half get it there every day; and 53% of all video views come from shares. “Video content on Facebook for now is primarily home videos or clips from YouTube and other sources. There is no serious content being developed only for Facebook. So at this point of time, from a brand perspective, it’s too early to change the media mix or develop serious content only for Facebook. At the same time, brands have started experimenting and investing in the video ad units. But it’s too early to say that they will start shifting inventory or investments from YouTube,” says Dey. “If a brand’s communication has to do with more fresh content reaching a targeted audience, Facebook would be more suited but if a brand is more geared towards pure product placement and launches, then YouTube would be better,” says Bharat Rajamani, Director-Marketing and Advertising Risk Services, EY.
As people get more accustomed to consuming video content individually curated for them within the news feed, Facebook’s credibility as a platform could drive a lot more views in the near future. And that could make all the difference in this online video war.
Feedback: aliefya@exchange4media.com
