A Look at Social Video’s Big, Bright (and Somewhat Uncertain) Future

Facebook can bypass not only traditional providers, but also services such as Netflix and Amazon, when it comes to widespread distribution and advertising opportunities.

Facebook has done it again–at least, it’s about to. The social media juggernaut is notorious for forward-thinking strategies such as acquiring Instagram and Oculus VR and launching live videostreaming. It’s never been the platform that rests on its laurels. Now, it stands at the forefront of a video revolution.

The explosion of Facebook Live hints at its potential for broadcasting major events and engaging viewers in ways standard channels struggle to do. Imagine online access to the Super Bowl streamed through a Facebook TV application that connects to users’ big screens.

Facebook can bypass not only traditional providers, but also services such as Netflix and Amazon, when it comes to widespread distribution and advertising opportunities.

The race for eyes and inventory

Facebook isn’t the only social platform in the live video race. Twitter competed aggressively with Facebook for the rights to stream Thursday Night Football in partnership with the National Football League, and such face-offs will occur more often as sports franchises re-evaluate their cable contracts.

Most are locked in through 2022 as a result of negotiations that happened in 2010 and 2011, when Facebook didn’t have video and Netflix was only testing digital streaming. The landscape was different then, but in a few years, I predict that social and streaming services will be in the mix for those agreements.

In the fragmented world of video consumption, sports viewership seems to be the only steady programming for the cable industry, as most entertainment and news content is available elsewhere. Companies such as Netflix and Amazon stand to gain considerably if they’re able to hook avid sports fans, in addition to viewers who subscribe for their licensed and original programming. A massive bidding war could erupt once NFL and Major League Baseball television contracts go up for grabs.

Six years is a long time in the digital world, and no one knows what Facebook’s valuation will be in 2022. But there’s little doubt that it will be a strong contender for such deals.

Facebook provides free, easy access to content, which aligns with consumer demands. Not to mention, it has the foundation for more advanced advertising opportunities within the space. The company also needs to pivot as Snapchat encroaches on its position as a personal and news-sharing outlet in a mobile-driven world.

However, Facebook and common streaming services can also co-exist. Amazon and Netflix create and own original content, while Facebook serves solely as a distribution tool. But theoretically, how could the environment change if networks such as Comedy Central or ABC choose to deliver their content exclusively through Facebook and share ad revenue, rather than paying subscription fees?

Full Frontal With Samantha Bee has tested airing full 30-minute episodes on Facebook Live before they air on cable, and Mr. Robot surprised fans by premiering the first episode of the second season via Facebook Live three days before the airdate.

Before too long, Facebook may compete with basic television, while Amazon, Netflix, HBO and Hulu double down as premium content creators. One is the tool for the masses; the other serves the niche through custom programming.

What it means for advertisers

How many times have you watched a show on Hulu with the same ad delivered multiple times during each of the commercial breaks?

Facebook has mastered the ad-delivery mix, with different ads following different users based on their behaviors and preferences.

Yes, I realize Facebook can draw from a more varied ad pool. But you can imagine how transitioning that process to larger screens could be achievable–making it an attractive platform for advertisers, especially if they’re already spending heavily with the company.

The streaming TV world lags behind in this area, and we expect that Facebook video buys will jump as more brands catch on and build creative for this purpose. The company is only starting to experiment with mid-roll within Live content, and its premium inventory will become increasingly coveted. However, Facebook’s massive audience reach keeps costs lower than targeting Hulu users, who represent a much smaller pool of consumers.