Facebook Muscles Into YouTube Territory - And Into the Ad Revenue It Generates

Proving that first impressions are often wrong, Facebook has made some adroit moves into mobile and now online video since its embarrassing IPO.

Meanwhile, Google which dominated the net in many areas - especially with its acquisition of YouTube - is now playing catchup and losing share to Facebook.

As video becomes a dominant form of communication as well as entertainment, this could be the crucial battleground for the future of the business of the internet. JL

Hannah Kuchler reports in the Financial Times:

Online video was once dominated by Google-owned YouTube. Facebook is moving in on the market, with more than 4bn videos viewed on the site each day in the first quarter of this year.

People are watching more video online as connection speeds improve, enabling them to view on mobile, and as younger generations watch less TV.
Facebook is muscling further into YouTube’s territory with a trial to share advertising revenue with video creators who publish on the social network. Facebook, which has 1.4bn monthly active users, will match the revenue split offered by YouTube, giving publishers 55 per cent of the proceeds of sales of adverts that run next to their videos.It said the new Suggested Video product would show a user similar videos to the one they last watched. It is working with an undisclosed group of media companies and video creators for the test, which will not generate revenue at first.
The test would “help people discover more videos similar to the ones they enjoy” while sharing revenue with video creators, said a spokesperson.

Online video was once dominated by Google-owned YouTube. Facebook is moving in on the market, with more than 4bn videos viewed on the site each day in the first quarter of this year.

People are watching more video online as connection speeds improve, enabling them to view on mobile, and as younger generations watch less TV.
YouTube has created many stars, from Tyler Oakley to Zoella, who are especially popular with young people and can survive and in some cases thrive off the advertising revenue it shares with them.
Facebook is also pushing into digital video advertising, the market for which increased by 56 per cent in 2014 to $5.8bn in the US alone, according to research company eMarketer. This is forecast to increase another 30 per cent this year to $7.7bn. YouTube had a 19.3 per cent share of the market, which eMarketer predicts will fall to 17.7 per cent by 2017.This week Facebook changed the rules for some of its video adverts as it tries to appeal to more big brands worried about whether users actually watch a video. Instead of charging for each video a person sees, it will experiment with charging only when they watch for 10 seconds.
The deal to share revenue comes after Facebook launched its first product where all the revenue from advertising goes to publishers. In Instant Articles, which is designed to make news stories from partners including the New York Times and The Guardian load more quickly, the publishers serve their own adverts on Facebook’s site and keep all the revenue.