$1 Billion To Be Invested By Facebook In Original Video Content

Reports indicate that Facebook is willing to allocate up to $1 billion in its original programming ambitions. The amount that Facebook will actually spend on original video will however depend on how successful the initiative turns out to be, according to sources.

If the social media giant goes ahead to spend $1 billion, that would be a far higher amount than what it spent on video in 2016. It would also be an indication that Facebook has accepted the fact that in order to realize chief executive officer Mark Zuckerberg’s ambitions of making the social media site a ‘video-first platform’ it has to spend money.

Online competition

The social media giant’s foray into video content will pit it against tech firms such as Netflix and Amazon which are flush with cash and which are eyeing original programming in order to lure subscribers. Facebook will also have to face off with traditional broadcasters who include Time Warner’s HBO. Additionally Apple is also planning to invest in original video.

The entry of Facebook into original video programming comes at a time when the social media firm is looking for new growth avenues as a slowdown is expected in its core advertising business. It is also an indication that Zuckerberg’s views on paid-for content are evolving after he had earlier resisted such a strategy. But even though the Facebook co-founder has said Facebook will pay for content for the time being, in the long run the social media giant will roll out a revenue-sharing model as a way of financing original video content.

Engagement and discussion

Part of the reason why Facebook is investing in original video is because it wants to differentiate itself in a market that is crowded by using programming which is capable of sparking conversation on the social media platform for its legion of users. Content such as sports also has the ability to deepen engagement besides forming topics of discussion.

Facebook’s interest in sports has seen the social media giant place a bid worth over $600 million for Indian Premier League’s cricket matches for the period between 2018 and 2022. The social media giant was however outbid by Star India, a subsidiary of 21st Century Fox which placed a bid of $2.6 billion for both digital and broadcast rights.

Besides original video programming Facebook is seeking to clinch agreements which will make it easier for users of the platform to watch and share video by securing rights from record labels that will allow background music in the videos that users upload.

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