Originally posted at Hacktivision.
UPDATE: And it’s happening. Facebook has a short-form content distribution deal with TBS.
Last week brought a lot of rampant speculation about the past and future of Facebook, now worth slightly less than $100 billion. Most media commenters, particularly on cable television, seem mostly nonplussed about how the company plans to live up to that lofty valuation. Unlike Google, which had a clear, robust money-making scheme in place at the time of its IPO, Facebook still doesn’t make a lot of money per user.
But, of course, 1/6 of the world uses Facebook. Even if its numbers stop climbing, which they are bound to do, that’s still a lot of people. Any company that can’t make more than $1 off 900 million users doesn’t deserve to be publicly traded. Of course, the best outcome for Facebook users is a private Facebook that doesn’t feel pressured to eek out higher margins every quarter off its community of users, the doom of many a great corporation.
It’s public now, so money needs to be made. And I think it will make plenty of it. How? There are a lot of plans, most of which involve keeping you signed into Facebook at times and serving adds to you across the web, utilizing all the information you’ve voluntarily uploaded.
What about television? Facebook chiefs have already said it sees itself as television, if only because of that medium’s advertising story (from sponsored programming to leveraging its oligopoly to sell high-cost ads to a range of brands).
The smart bet is that Facebook will move even more heavily into video than it already has. Last year we found out studios like Warner Bros. have been seeking out Facebook as possible distribution portal for films. Warner also used Facebook for its original web series Aim High, an ambitious teen show which integrated the social network’s users’ information in a limited way, and which is coming back for a second season. Facebook is already a top-five video network, with around 40 million users watching around 30 minutes of video on the site. But no one thinks of Facebook as a network — yet.
What’s wrong with television? Michael Wolff correctly points out that television is a top-down medium, at odds with Facebook’s allegedly bottom-up beginnings:
“Giving power to your audience certainly seems to have a historical imperative behind it. But awkwardly, social media still depends on advertising which, fundamentally, depends in turn on a set of top-down manipulations that control what your audience thinks and feels at a given moment.”
I say “allegedly bottom-up” because we all know — and The Social Network reminded us — that Facebook started at Harvard by a bunch of young, wealthy white guys, like most tech companies. That said, empowering users is a core part of the company’s rhetoric. It’s its one defense against the mountain of criticism it has faced for invading privacy, avoiding and gaming regulation, not to mention peculiar policies like taking down the photos of gay and trans users.
What television offers are high margins and, if Facebook gets it right, relatively stable revenue streams. Get users used to going to Facebook for video at certain hours in the day, and the company will have a massive global audience primed for monetization.
I wouldn’t be surprised if Facebook decides to jump more heavily into original production, like the other big video networks — MSN, AOL, Yahoo, Hulu and YouTube. A Facebook Upfront would be a fascinating thing to see. And I imagine profitable.
At the very least, it’s better than loading up news feeds with a steady stream of ads.