People may open Facebook or Instagram every day to see what’s new with friends and family, but what keeps them scrolling for hours is the content.
Tech giants have realized that having a healthy ecosystem of content creators—the users who publish viral videos and Internet celebrities who record their entire lives—on their services makes users return and helps their businesses grow. There’s simply more for people to consume, more videos to put ads in front of, and more attention to monetize.
To encourage more of this content, Facebook will now offer $1 billion in rewards for those who create hit posts. Facebook will dole out cash to creators on its main app and on Instagram for using specific features, turning on ads that their audiences must watch, or achieving yet-unnamed milestones.
Facebook is following TikTok’s lead on this. The Chinese bite-sized video service had previously set up a $2 billion Creators Fund, which pays well-known creators a few cents for every thousand views on a video. When TikToks hit hundreds of millions of views, the cents add up.
But the undisputed master of the strategy is YouTube, which started its partner program all the way back in 2007 to incentivize high-quality videos. It paid off. YouTube’s 2 billion monthly users watch more than a billion hours of video daily, and the company has paid creators more than $30 billion in the last three years.
A billion dollars is a lot of cash, but the key difference between Facebook and TikTok’s strategy, as opposed to YouTube’s, is sustainability. Over the next few years, Facebook and TikTok will spend all that money with the hope of accelerating user growth, leading to more revenue. YouTube’s content acquisition and revenue strategy, in contrast, are already inextricably linked, meaning it’s much less of a gamble for creators long-term.
But creators should be wary of relying solely on Facebook cash, which is a promise of upfront rewards with no long-term commitment. Take that advice from journalists, whose industry pivoted heavily towards video and livestreaming because of lucrative contracts and the promise of growing viewership. That turned out to be far less sustainable than Facebook had promised, partly due to wildly inflated viewership metrics and contracts that Facebook didn’t renew, leading to a correction in which hundreds if not thousands of journalists lost their jobs.
Of course, creators arguably already have a better business model than journalists. They at least benefit from the competition between platforms to recruit them for making content. That may be why YouTube alone paid its creators the equivalent of 345,000 full-time salaries in 2019, at a time when the U.S. has only about 85,000 journalists.
Dave Gershgorn
@DaveGershgorn
NEWSWORTHY
Let the games begin. Streaming service Netflix plans to expand into video games by hiring a Facebook gaming exec who had previously worked on mobile games at Electronic Arts and Zynga. Other game-streaming services like Google Stadia and Microsoft xCloud let users without expensive PCs run games on Google and Microsoft's servers, while only the video is sent to their devices. This lets mobile devices and lower-cost laptops play the latest games in high resolution. It's unclear whether Netflix will take the same tack, but it could allow the company to tap into the multi-billion dollar gaming market.
Digitizing brain waves. Scientists have decoded brain waves into text, a stunning step forward for those with disabilities who are otherwise unable to communicate. The idea is similar to Elon Musk's Neuralink startup, which has been unsuccessfully trying to also use brain implants to digitize and interact with the brains inner workings. But this win was scored by good old academia. The project was conducted at the University of California, San Francisco.
An emoji you can hear. Facebook introduced "soundmojis" into its Messenger app today. which are small clips of audio like applause or a popular snippet from a TV show. Right now you have choices like clapping, crickets, or drumroll, as well as audio clips from the latest Fast and the Furious movie. Please never send me one.
Amazon shoots for the stars. The e-commerce giant has reportedly acquired more than a dozen of Facebook's Internet engineers, in a play to accelerate its satellite Internet project called Project Kuiper. While Amazon lags far behind SpaceX's Starlink service, which already has 10,000 subscribers in its beta test, it does have U.S. approval to one day launch more than 3,000 satellites of its own.
FOOD FOR THOUGHT
Apps are stealing your friends. Or at least, their contact information. Apps that sync with our phone's address books can often ferret that information away to be sold to data brokers, leaking our friends and family's contact info without our knowledge, The Washington Post reports.
In the past, digital contacts haven’t drawn as much attention as other types of personal data that tech companies collect and share, such as your location information or browsing histories. But digital contacts contain valuable information about you and the people in your circle. Few major changes have been made to contacts’ privacy options on Android and iOS devices since 2012, when Apple first added an option to control what apps had access to them.
IN CASE YOU MISSED IT
Following Coinbase’s direct listing, Initialized Capital expands with a new partner by Lucina Shen
Mercedes earnings show that the car chip shortage hasn’t been all bad for automakers by Christiaan Hetzner
Female migrant workers and the families they support are being abandoned by the money-transfer industry by Louise Donovan
China’s digital yuan is not going to displace the U.S. dollar, according to this economist by Nicholas Gordan
What is sideloading? Everything to know about tech’s latest flash point by Adrian Croft
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BEFORE YOU GO
Check out this beluga cam. Who doesn't love beluga whales? Thanks to the magic of underwater camera technology, which is surely akin to sorcery, you can now watch nearly 60,000 whales migrate up Manitoba’s Churchill River. This is tenuously related to technology, but it really is a treat. (There's also sound.)
You can watch the whales here.
And one more thing:
The Growing Power of No-Code/Low-Code Software Development
In a digital world, the ability to code – to train a computer, using its own language – is key, hence the enormous push to make people literate in programming languages. “Don’t just play on your phone,” urged President Barack Obama in 2013, “program it.” But the demand for digital applications outstrips the programming talent, especially during COVID-19, when digital accessibility is a necessity. Enter low-code and no-code application development: Platforms where software is configured visually, using drag and drop interfaces. They’re faster and cheaper to use than traditional coding, but how well do they work?
On today’s Brainstorm, Brian O’Keefe and Fortune’s Robert Hackett discuss the promise of low-code and no-code platforms, and how they've stood the test of emergency situations brought on by the COVID-19 pandemic.
Laela Sturdy is a general partner at Capital G, Alphabet’s growth equity investment fund, which helps growth-stage tech companies scale. She says the power of these platforms is to enable creators and non-technical people to access the power and magic of code.
Michael Beckley is the Chief Technology Officer of Appian, the first company to go public as a low-code vendor. He says low-code has the power to deliver to clients perfectly tailored software in half the time.
Also in this episode, Veronica Soto, director of San Antonio’s Neighborhood and Housing Services Department describes digitizing an entire rental assistance program in a week, at the outset of the pandemic, in partnership with low-code platform Mendix. Listen to the podcast here.
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