Recent moves by Facebook (FB) have left little doubt about what the company is up to on the digital video front.
While Facebook’s aggressive video push is certainly designed to give it a front row seat to the digital video advertising market, the company also appears to be putting subscription video providers such as Netflix (NFLX), Amazon (AMZN), DISH Network (DISH), and Alphabet’s (GOOGL) YouTube on notice.
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The streaming video market is growing rapidly in the United States, with eMarketer projecting that ~222 million Americans will stream or download digital videos in 2017. The number is projected to rise to 239 million by 2021. The chart above depicts this growth.
The recent hiring of MTV executive Mina Lefevre has removed any doubts about Facebook’s interest in original video content, a segment that Netflix and Amazon seem to have dominated with their huge originals budgets. Netflix alone is expected to spend $6 billion on content acquisition this year, up from $5 billion last year. Amazon is also spending billions of dollars on acquiring original shows and movies for its Prime Video service.
Lefevre joins Facebook as the head of development, and she’ll spearhead the company’s efforts to develop scripted and unscripted video content. These are areas in which Lefevre has a wealth of experience, considering that she was the head of scripted development at MTV, working on popular shows and films such as Teen Wolf, Awkward, and Scream, according to Deadline.
If Facebook is stepping up its originals push with the help of industry experts such as Lefevre, then Netflix, Amazon, and others with similar aspirations in the space have reason to be afraid. Facebook’s move will tighten the competition for online video content and its audience, potentially driving up the cost of content.