30 May

What’s Facebook’s Future in the Video Space?


Television ad budgets

Facebook (FB) is funneling what is likely to be millions or even billions of dollars into the production of original television-like video content that will be available on its social platform, Business Insider reported. Facebook’s video hunt also includes live sports.

This report comes after the Wall Street Journal reported earlier this year that Facebook was developing a standalone television app that would allow users to watch videos shared on the site on big screens via set-top-boxes such as Apple’s (AAPL) Apple TV.

What’s Facebook’s Future in the Video Space?

Bright future in video

Reports that Facebook is expanding into the video space aren’t new, as the company has recently dropped several hints that it sees a bright future in the video business. However, the extent to which the company seems to be willing to delve into video is surprising, and it speaks of a company so hungry for new growth that it is even willing to rattle partners that it has been trying to court.

The share of video advertising spending (QQQ) as a portion of total digital advertising budgets is on the rise. Beyond advertising, digital videos are also being monetized through subscription-based services like Netflix (NFLX) and Amazon (AMZN) Prime. Spending for subscription videos available on demand (or SVOD) is projected to hit $108.6 billion by 2026, rising from $45.0 billion in 2014, according to research firm Future Market Insights.

Facebook ready to upset partners

Whether Facebook goes the advertising route or the subscription route with its video business, it is poised to upset many traditional media companies, some of which it has been wooing to its instant articles feature.

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