Facebook Is Trying to Win the Video War Using YouTube’s Own Playbook
A web giant is trying to ramp itself up as a video platform, so it starts paying content creators to use the service, and—at least initially—doesn’t seem all that concerned about things like rampant copyright infringement. Is that a description of Facebook now, or is it a description of YouTube in its early days?
That’s a trick question, of course—the correct answer is both. In many ways, the game plan that Facebook (FB) has been pursuing for the past year or two when it comes to video is very similar to the one YouTube used to become the king of online video almost a decade ago. The only difference now is the stakes are higher, and there’s another very rich and powerful player also vying for the video throne.
The fact that Facebook is overwhelmingly focused on video should be blindingly obvious to anyone who spends any time on the social network with auto-playing clips popping up everywhere. CEO Mark Zuckerberg has made it clear that video is the future, and multiple sources say the Facebook co-founder essentially re-oriented the entire company towards video over the past year or so in a massive organizational shift.
Part of Facebook’s initial growth in video came from providing what amounted to a Wild West landscape for video uploading. It was something very much like YouTube (GOOG) was in its early days, where rampant uploading of copyright-infringing content was extremely common—to the point where YouTube was sued for $1 billion by Viacom.
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On Facebook, this practice is known as “freebooting,” and the network has been called out repeatedly by high-profile video artists such as Hank Green and Casey Neistat, who say they have had their content stolen repeatedly. (It only increases the irony that much of this involves video clips taken from YouTube.) After much criticism, Facebook recently launched an unauthorized-content tool called Rights Manager, which is similar to YouTube’s ContentID system.
Although it started with uploaded video clips, however, Facebook’s current focus is all about live-streaming video—something that wasn’t as big a part of YouTube’s early days in part because smartphones were still in their infancy and bandwidth was limited.
As part of that focus, Facebook is now paying the creators of video content directly, both large and small. According to a number of reports, the company is offering celebrities cash payments to use its Facebook Live video feature, and is also reportedly paying media outlets such as BuzzFeed to host their video on the service. BuzzFeed said the current deal being offered is $250,000 in return for 20 live shows a month.
YouTube also spent a lot of money trying to get content creators of various kinds to set up shop on the service. One program, known as the “Original Channel Initiative,” invested as much as $300 million in payments to a wide range of different video artists and early adopters, including Madonna, Pharrell Williams, and Ashton Kutcher.
The Original Channel Initiative was mothballed in 2013, at least in part because it appeared to be economically unsustainable, even for a web giant like Google. But from YouTube’s point of view, it achieved what it was supposed to achieve, which was to create the impression that the video service was a place where you could build a business as an independent video creator and make money.
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As YouTube evolved, those direct payments turned into ad-revenue sharing agreements through the Partner Program, which was originally open only to specific partners but was eventually opened to everyone. Facebook also recently started sharing ad revenue with partners, although the program is still in its infancy.
More recently, YouTube launched the YouTube Red paid-subscription program, which is at least theoretically designed to give content creators and artists a dependable revenue stream—although some YouTube users saw it as a heavy-handed attempt to force them into a specific revenue model. Will Facebook eventually do something similar with Facebook Live, by offering it to video creators both large and small?
One obvious difference between now and the early days of YouTube is that Facebook is orders of magnitude larger than YouTube was when it started trying to become a global video platform. Facebook has over 1.5 billion users, and much of what they consume is video—more than nine billion views a day, although the way that the platform counts views (anything over three seconds) remains somewhat controversial.
Can Facebook use its massive reach and resources, combined with pages taken directly from YouTube’s own playbook, to beat the Google subsidiary at its own game? And how will Facebook deal with Snapchat, which has been racking up video numbers as high or higher than the social network? Grab some popcorn and stay tuned because the battle has only just begun.