Facebook Challenges Netflix and Amazon By Going Hollywood

Having seen what Netflix, Apple and Amazon have achieved, Facebook wants to make its electronic ecosystem even stickier by hoovering up audience, ad dollars and - of course - data. JL

Joe Flint and Deepa Seetharaman report in the Wall Street Journal:

The social-networking giant is talking to Hollywood studios and agencies about producing TV-quality shows with an eye toward launching original programming. Facebook has indicated it is willing to commit to production budgets as high as $3 million per episode. The push for TV shows is part of a two-track effort at Facebook to up its game in video and target the tens of billions of ad dollars spent on television.
Facebook to Hollywood: Let’s do lunch.
The social-networking giant is talking to Hollywood studios and agencies about producing TV-quality shows with an eye toward launching original programming by late summer, people familiar with the matter said.
In meetings with major talent agencies including Creative Artists Agency, United Talent Agency, William Morris Endeavor and ICM Partners, Facebook has indicated it is willing to commit to production budgets as high as $3 million per episode, people familiar with the situation say.
That’s the price range of high-end cable-TV shows. Facebook is also interested in more moderate-cost scripted shows in the mid-to-high six-figure-per-episode range, these people say. The company will be aggressive about trying to own as much of that content as possible.
The push for TV shows is part of a two-track effort at Facebook to up its game in video and target the tens of billions of ad dollars spent on television.
Facebook also is seeking short-form content, primarily unscripted, that could run for 10 minutes in the Spotlight section for videos, the people familiar with the matter say.
The social network is guaranteeing creators of short-form fare a minimum $5,000 to $20,000 share of ad revenue per episode, a person familiar with the company’s strategy said. Companies working on such content for Facebook include BuzzFeed, ATTN and Refinery 29, according to people familiar with the situation.
Facebook declined to comment on specifics of its content plans. In a statement, Vice President of Media Partnerships Nick Grudin said, “We’re supporting a small group of partners and creators as they experiment with the kinds of shows you can build a community around—from sports to comedy to reality to gaming. We’re focused on episodic shows and helping all our partners understand what works across different verticals and topics.”
Facebook has told people in the industry that late summer is a bit of a moving target for launch. It hopes to target audiences from ages 13 to 34, with a particular focus on the 17-to-30 range. It appears to be seeking shows along the lines of the drama “Pretty Little Liars” on Freeform, the cable channel formerly known as ABC Family, or similar to ABC’s “Scandal” and reality hit “The Bachelor,” people familiar with the matter say.
Among the shows Facebook already has lined up is “Strangers,” a relationship drama aimed at millennials that made its debut at the Sundance Film Festival, and the game show “Last State Standing.”
Facebook is willing to take another network’s castoffs or “distressed assets,” as one entertainment executive put it. The company is nearing a deal for the family comedy “Loosely Exactly Nicole,” which Viacom’s MTV canceled earlier this year after one season. An executive familiar with the show said its budget was in the $1 million-per-episode range.
“Loosely Exactly Nicole” is near and dear to Mina Lefevre, who developed it while at MTV and now heads Facebook’s development effort, reporting to Ricky Van Veen, founder of the website CollegeHumor, who joined Facebook last year.
Facebook has told people it wants to steer clear of shows about children and young teens as well as political dramas, news and shows with nudity and rough language.
Facebook enters a bustling TV scene where old and new players are creating a staggering amount of original programming, making it hard for even good shows to break through. Last year there were more than 455 scripted shows on TV.
Compared with digital players such as Netflix Inc., Amazon.com Inc. and Hulu, which have been in TV for years now and have well-stocked pipelines of original programming, Facebook is late to the game. Apple Inc. is also hunting for original TV programming and just hired two top executives from Sony Corp.’s TV studio.
The longer-form scripted shows on Facebook are expected to run no more than 30 minutes and will carry ads. A potential challenge for Facebook is Hollywood’s desire to own much of its content. Typically, studios and producers effectively rent their shows to networks through licensing deals, and are reluctant to part with rights to shows in perpetuity.
The entertainment industry is eager to see if Facebook can translate the data it has on tastes and habits of nearly two billion monthly users into insights that make for more popular television.
Facebook is expected to spread out the release of its episodes, in the traditional fashion, rather than dropping an entire season at one time, as Netflix and Amazon do, the people familiar with the matter say. Facebook sees its platform as an in-house water cooler of sorts, ideal for building a social community around shows.
In another move that will distinguish it from Netflix and Amazon, Facebook is also telling Hollywood it will share viewership data with them.
“Facebook is saying, ‘We’re going to be completely transparent,’ ” one agent said. “ ‘You’ll share in our ad dollars, our profits will be your profits, you will get all the data.’ It’s a humongously different mind-set.”