Facebook could become the next generation's version of cable if it continues to encourage digital media companies to make video content, said Ben Lerer, CEO of Group Nine Media.
"We're in a pretty interesting place right now where the social pipes of Facebook, Snapchat, Instagram, Twitter, YouTube are sort of modern day version of what the cable pipes were for our generation and older people," Lerer told CNBC's "Squawk Box."
"I think there's an opportunity to build huge media companies on these platforms, and Facebook is starting [to] lean in and sort of recognize that they need to create an opportunity for brands, for publishers to make money on their platform."
Lerer declined to comment on a Reuters report that his company has reportedly signed an agreement with Facebook to produce millennial-focused shows alongside Vox, BuzzFeed, ATTN and other companies.
Lerer, who also serves as managing partner at media investing firm Lerer Hippeau Ventures, added that he doesn't think Facebook has any ambitions to go into content creation. But, he says, the company and other social media platforms are realizing they can tap into $70 billion in TV advertising dollars.
"The people who have grown up with a smartphone in their pocket, they have a different relationship with media and TV," Lerer said. "They consume in fits and bursts."
Facebook had been a "challenging partner" in the past, but conversations have changed in the last two years, Lerer said. The company is no longer positioning itself as a way of connecting with friends but as a video publishing platform that brands need to access, he added. Facebook has also begun testing mid-roll ad formats, where advertisements run in the middle of
However, the way things stand today, social platforms won't be able to replace TV's revenue stream for media companies, Lerer admits. The majority of the ad dollars go to the content creators on television, but Facebook and other online platforms get the lion's share, he added.
"The TV model is a beautiful business model, but I don't think we have clarity on how we are going to build such good business in digital media yet. ... Digital media brands are going to have to find other ways to make money, [like] commerce through subscription, licensing. It's not going to be as clean, and it's not clear what it's going to look like yet," he said.
Disclosure: CNBC parent NBCUniversal is an investor in BuzzFeed and Vox Media.
Correction: This story was revised to correct the spelling of Ben Lerer's last name and the spelling of Lerer Hippeau Ventures.