10 Jan

What Is Facebook’s Strategy to Grow Its Live Video Service?

WRITTEN BY Ruchi Gupta

Facebook is offering financial aid to live video publishers

Facebook (FB) appears to have successfully positioned its live video service as the solution traditional newspaper publishers need to overcome the pain of shrinking print revenue. The New York Times (NYT) is one media publisher that has embraced Facebook Live to grow its digital operations. The company recently said its live videos on Facebook Live have generated more than 100 million views.

However, it turns out that Facebook is offering financial support to video publishers to make Facebook Live more popular with publishers and viewers. According to a Wall Street Journal report, the New York Times could be one of the companies receiving financial aid from Facebook to publish live videos on Facebook Live. The report said Facebook may have paid the New York Times $3.0 million under a one-year live video content agreement running from March 2016 to March 2017.

What Is Facebook’s Strategy to Grow Its Live Video Service?

A boost for digital business

While Facebook’s financial support would be a one-off gain for the New York Times, the company sees long-term gains if Facebook Live grows more popular. According to the New York Times, its digital ad revenue rose 21.4% in 3Q16, but print ad revenue dropped 18.5%. Print ads now account for 22% of the company’s total revenue compared to 35.5% from digital ads. The New York Times has realized that video plays a major role in growing its digital business.

As for Facebook, a successful Facebook Live feature would boost its campaign for digital ad spending against Twitter (TWTR), Yelp (YELP), Amazon (AMZN), and Alphabet’s (GOOGL) Google.

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