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Arts & Entertainment

Why TV Companies Are Rejecting Facebook Video Deals

By
Chauncey L. Alcorn
Chauncey L. Alcorn
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By
Chauncey L. Alcorn
Chauncey L. Alcorn
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August 11, 2016, 5:37 PM ET
New York Giants v Miami Dolphins
Lamar Miller #26 of the Miami Dolphins carries during the first quarter of the game against the New York Giants at Sun Life Stadium on December 14, 2015 in Miami Gardens, Florida. Photograph by Chris Trotman — Getty Images

Some of America’s top producers of TV content are saying no to video deals with the world’s biggest social media site.

Facebook (FB) has been trying to woo the NFL, Comcast’s NBC Universal (CMCSA), Disney’s ABC (DIS), and other “premium content” creators to purchase “Suggested Video” ads and Facebook Live features used 0n the company’s site, but so far most of the major players have declined its advances, The Wall Street Journal reports.

Facebook’s Suggested Video ads were introduced last year to compete with Google’s YouTube. When users click to view videos in their Facebook Newsfeed, the ads appear as “Related Videos” beneath the video being viewed.

Networks fear the ad feature and Facebook Live content will compete with programmers’ own video sharing features and take traffic away from their self-hosted digital content, The Journal reports.

 

Even Time Warner, which inked a one-year, $2.5 million contract with Facebook to produce live video content, isn’t sure if it can turn a profit from the venture.

“If we can’t figure out a way to monetize it, it’s hard to see the long-term viability,” Time Warner Editorial EVP Andrew Morse told The Journal.

Facebook has been fiercely competing with Twitter (TWTR) for marketshare in the still-emerging social live stream and video content sector, spending millions to secure live stream deals with YouTube celebrities and BuzzFeed since introducing the feature last year.

Facebook VP Nicola Mendelsohn in June predicted the site could be “all video,” within five years. “If I was having a bet,” Mendelsohn told Fortune, “it’d be video, video, video.”

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