Facebook announced its Q4 2016 earnings yesterday, significantly beating analysts forecasts. While mobile has been the key driver of Facebook’s recent revenue and earnings growth, video (both mobile and desktop) continues to become a more significant part of Facebook’s financial success.
CEO Mark Zuckerberg spent a good portion of his remarks on yesterday’s earnings call talking about the continued rollout of video on Facebook, referring to video as a “mega trend” into which Facebook will invest heavily.
To that end, Facebook has recently rolled out its new video tab to all of its users in the US, which will make it much easier for Facebook users to discover and watch videos.
At the same time, Facebook is paying certain creators up-front for what it calls “seed content” for its video tab, while extending the opportunities for independent creators to generate advertising revenue from their content. This creates an exciting opportunity for video creators of all types.
To date, while Facebook has driven a significant portion of overall digital video views, yet, monetization for video creators on Facebook has been fairly limited. However, in the recent weeks we’ve seen that Facebook is focusing on better monetization for video creators by testing their mid-roll ad strategy.
In the coming months, we expect to see an increasing number of digital video creators embrace Facebook as a key video distribution and marketing channel for their videos. We also expect to see even more brands and media companies investing in better understanding how they can leverage the Facebook video tab to distribute and market their own content as well as sponsor and/or license content developed by independent third-party creators.
The bottom line is that Facebook is continuing its march towards becoming more of a legitimate YouTube competitor. And that competition in the market should be a boon for content creators and producers of all types.
Where does Facebook go from here? As video becomes an even more important part of the Facebook story, we wouldn’t be surprised to see the Facebook video tab ultimately spun out as a separate app, similar to Messenger.
We heard Facebook warn that they may start seeing a decline in revenue growth because they may run out of ad space in mid-2017. However, we also suspect that at some point in the future, Facebook will follow the path of YouTube Red, Amazon Prime Video, and Netflix and begin to license or produce exclusive premium long form content for distribution through Facebook video.
If they are able to do this, it will capture more ad space and revenue through an increasing share of TV advertising dollars as consumers continue to shift their attention away from traditional TV towards Internet video of various lengths and genres.
At ICX Media, we are excited to watch the emergence of another major video channel for independent video creators. Our platform is a great way for independent video creators and producers to manage distribution, marketing, and monetization across multiple video channels including Facebook, YouTube, Vimeo, and many others.
Stay ahead of the rest and learn more about the ICX Media Creator Portal by signing up for your account today.