Media deals hint of Facebook’s strategy
Facebook (FB) has started making moves that could further rattle the pay-TV industry, which is already taking a beating from the rise of cord-cutting. A lot seems to be hidden in Facebook’s partnership with Vox Media, Group Nine Media, BuzzFeed, ATTN, and a variety of other news and entertainment outlets.
According to a recent Reuters report, these media outlets would produce video programming for Facebook to share on its social network. What is notable about media outlets such as BuzzFeed and Vox Media is that they appeal to a young audience—Millennials.
Facebook’s strategy of working with these media publishers may not be simply another video content deal that social media companies are inking with news organizations and major sports leagues.
These deals indicate that Facebook seems to be crafting its video strategy to appeal to the coveted youth demographic in the marketing world.
Facebook’s appetite for Millennials bruises Snap
Facebook (FB) has used a set of disruptive strategies to attract Millennials to its platform at the expense of rivals such as Snap (SNAP) and Twitter (TWTR). These strategies have included tapping strategic assets such as the acquisition of Instagram and WhatsApp, as well as cloning popular features from its Millennial-oriented rivals.
These are the strategies that Facebook seems set to unleash on pay-TV operators like Charter Communications (CHTR) and Dish Network (DISH) to attract their advertisers. It’s hard to imagine a television advertiser that would resist Facebook if it can show it has the attention of Millennials.
As the chart above shows, marketers have continued to show a willingness to spend more of their advertising budgets online than on television.