In an obvious attempt to lure video creators away from YouTube, Facebook will be offering many of them a share in the revenue that is generated from ads on or near their videos. Starting this fall, video creators including the NBA, Fox Sports and Funny or Die, will receive a 55% cut of the ad revenue that appears on the social network on or near their videos.
YouTube has long been giving content makers a portion of the ad revenue, so this is somewhat of a game of ‘catch up’ for Facebook, but an important one none the less. YouTube offers the same 55/45% revenue split. The big advantage that Facebook will have is that it is actually growing much more rapidly in terms of generating video views.
Thanks to their auto-play feature and the massive popularity of the social network, many video creators will be able to get millions of views with fairly little promotion. In addition, Facebook makes it easier for these videos to be seen by people who aren’t directly searching for them. As videos get liked or shared by people on Facebook, the audience will naturally grow. While there is some of that on YouTube, the bulk of videos are seen by people who are actually searching for a specific topic.
Video creators have been using Facebook in the past because it was an important tool for getting their videos seen by this huge audience. This, however, will provide further incentive. Dan Rose, VP of Partnerships at Facebook recently told Forbes, “Partners say they’d publish a lot more if they could get benefit of distribution but also make money.” Of course, this is not really surprising. Paying video makers to publish on your platform is an obvious way to increase the total number of videos being published.
How it will Work
The system will work when someone clicks on a video in the News Feed. They will then see a suggested videos page, with a list of videos created by Facebook’s algorithm. These videos will be similar to the original content, and will play automatically as the user scrolls through. Unlike typical News Feed videos, which start off muted, these will play with sound since the user has already opted to hear it with the original video click.
The videos that are viewed on this suggested videos page will generate revenue for the publishers. If someone watches multiple videos in one session, the revenue will be split based on the amount of time the user spends on each video.
Currently this system is still technically just in testing phase according to Facebook. Assuming it is fully rolled out, many expect that the number of video creators that qualify for the program will grow significantly. It is not yet clear, however, how marketers will be buying space on the Suggested Videos page. For now, Facebook won’t be charging advertisers for these ads so that they can see how the system will work in a live system.