Tucked inside Facebook's call with investors Wednesday after a strong third-quarter earnings report — which included a milestone of more than a billion daily users — was the revelation from chief executive Mark Zuckerberg that Facebook content owners will eventually pocket a revenue share of video views.
"There's a certain class of content which is only going to come onto Facebook if there's a good way to compensate content owners for that," Zuckerberg said when asked how to keep media partners happy. "We've recently rolled out the business model for this. We'll give a revenue share on a portion of the views to content owners," he said, as Wired has reported.
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This is obviously welcome news for Facebook video creators, who will be enticed to remain faithful and linger on the social network for as long as possible. Whether it's to consume videos or news articles, tech companies would prefer users remain agnostic to a single platform.
But the implications of a video-view revenue cut are much broader — and potentially damaging for traditional publishers. Old-school media companies along with tech giants like Apple and Twitter are all chasing the same holy grail: Loyal content consumers, who linger and stick around amid a sea of too many content choices.
To grasp the scope of change unraveling in content creation, which is increasingly fragmented, consider all the mobile apps on your smartphone. How many do you click daily? Studies consistently show users thumb through only a handful of apps on a regular basis. This is why tech bellwethers — from social media platforms such as Facebook to traditional hardware companies like Apple — are churning out news products, designed to court and engage audiences to their brand-ecosystems.
Beyond the video cut for creators, Facebook plans to announce the launch of Notify, a standalone news app, the Financial Times reports. Featured content will come from media partners including Vogue, The Washington Post and CBS.
Facebook already has had success with another story feature, so-called instant articles in which Facebook directly hosts articles from news organizations such as The New York Times and NBC News.
"Facebook wants to move from being a driver of traffic to being a content provider," said Andreas Pfeiffer, a technology and emerging media analyst. "Facebook sees the big potential for being a media player," said the analyst, also author of the "Pfeiffer Report."
"There can be little doubt that we are at the beginning of profound transformations in the content market place," said Pfeiffer in a recent report.
Professional content already is splintered across content creators and technology platforms. And this trend will only intensify. Just consider these recent content-related products launched by technology companies:
Apple has rolled out its newsreader, Apple News, for iOS 9. The mobile app aggregates news from a wide range of sources into a mobile-friendly format, and has partnered with publications such as The New York Times.
Twitter Moments is a feature on Twitter that links tweets in a traditional story format, from beginning to end. When users consume tweets individually, most recent tweets are displayed higher with earlier tweets lower down in the scroll.
Snapchat has been partnering with publishers for Snapchat Discover. The app, widely popular with millennials, includes a "Discover" feature that showcases stories from publishers including Vice, People, CNN and National Geographic. The content is very visual, presented in quick bites — and sometimes nothing more than an inspirational graphic with a caption that reads, "The first step is the hardest." It may sound silly but since BuzzFeed joined Snapchat's "Discover" feature in July, BuzzFeed CEO Jonah Peretti has said a full 21 percent of its traffic is from Snapchat content views.
But tech companies becoming powerful distributors and gatekeepers of news makes many people in the news/publishing industry nervous.
And given the massive reach of tech company platforms, many publishers feel like they can't say no to a Facebook or an Apple. Content distribution on a tech platform is a tricky balancing act.
For example, with instant articles Facebook directly hosts outside publishers' articles on its social network — and Facebook pockets the traffic. Publishers can either sell and embed ads in the hosted articles, keeping all of the revenue, or allow Facebook to sell ads, with the social network getting 30 percent.
Pfeiffer wonders if content creators are losing sight of the long game. Publishers have said they only plan to offer a few articles to Facebook's platform.
"I'm not publishing my own paper anymore," said Pfeiffer about instant articles. "I'm publishing on someone else's platform. In the end, you lose your customers."
While some media watchers may object to news-related products, Facebook's overall strategy is paying off. The company reported third-quarter profit of 57 cents a share on revenue of $4.5 billion, up 41 percent over the same period last year.
The results beat Wall Street's expectations, sending shares higher to a market value of more than $300 billion — joining a narrow bench of highly valued tech giants including Amazon.com, Apple and Microsoft.
Facebook on Wednesday also said its daily video views have reached 8 billion, though some tech analsyts including Pfeiffer wonder if a single view is measured by only a few seconds on an autoplay setting.
Video broadly is on track to be among the most engaged pieces of online content in the coming years.
Facebook in fact is testing its own, site-specific video hub, as Re/code has reported. So instead of videos placed in user feeds and jumbled with your friends' streams of kids' pictures, users would be able to consume video exclusively. Again the goal is to entice users to remain on the social network for friends' updates and baby pictures, news articles and watching videos.
The social network also has a virtual reality or VR video effort. Facebook last year reached a $2 billion deal for Oculus VR, maker of a VR headset. While skeptics argue only gamers are likely to wear bulky goggles to dive into an immersive, 3-D digital experience, fans say VR could be the next big computing platform after mobile. Traditional news publishers including The New York Times and PBS' "Frontline" already are experimenting with 360-degree, spherical videos.
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