Social media juggernaut Facebook has been quietly negotiating with Hollywood moguls in an attempt to enter the original programming market. With the potential to add millions of dollars in new ad revenue, Facebook is willing to pay TV studios as much as $3 million per episode for exclusive streaming content.
As reported by CNBC, Facebook TV intends to create programming that will appeal to viewers ranging from age 13 to 34. The social site believes new, exclusive content will keep a younger audience on the site instead of losing them to competitors like Snapchat.
CollegeHumor co-founder Ricky Van Veen, Facebook’s global strategy chief, is in charge of the Facebook TV development project. He is working closely with several production companies and listening to ideas for various shows that will eventually be featured in Facebook’s improved video tab.
According to a recent article by Business Insider, Facebook TV will have some programming that will be high-quality productions similar to Netflix’s House of Cards. Other shows will be lower-level programs with smaller budgets, like videos that are common on Verizon’s go90 service.
A source close to the Facebook TV venture revealed one show has already been approved, but details have not been officially announced. The program is said to be “a virtual-reality dating show from Conde Nast Entertainment.”
Even though Facebook TV could create competition to video streaming giants Netflix and Hulu, the development of the video streaming service could be a direct response to another video giant, YouTube.
Last week, YouTube announced it was working with big name stars, including Ellen DeGeneres and Katy Perry, to create original programming. In contrast to the video behemoth’s current subscription service YouTube Red, the new streaming content will be supported by advertising and available to anyone.
It’s likely Facebook TV will use a comparable business model, with ads showing up at various times in the middle of the video. The social media site has been subtly testing the concept with a select few advertisers for the last several months.
While not officially confirmed, Facebook TV will likely launch sometime this summer with roughly 20 shows and several more waiting in the wings. Some programming will feature long videos, giving the viewer the feel of watching traditional TV, while most shows are expected to be less than 10 minutes in length.
It’s hard to say if Facebook TV will be a success, yet statistics show most posts that go viral on the site usually contain some kind of video. So, there is potential.
Yet, before company executives commit millions of dollars to the creation of original programs, they will need to be sure site visitors will spend numerous hours watching a show on Facebook’s video tab and click on enough ads to make a difference to the bottom line. YouTube has done it effectively for years, so Facebook TV probably has a pretty good chance.
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