The Facebook Well Will Dry Up…Eventually, As Mark Zuckerberg Sets Sights on Becoming More Like YouTube.
If listeners walked away from Facebook’s Q3 earnings call today with only one message, Mark Zuckerberg would have wanted it to be centered not on video, but on community and the power of building experiences around its suite of products. Though the questions from listeners were plenty focused on video and Facebook Watch, Zuckerberg and his team appear to anything but enamored with the trend of funding originals established by its fellow media companies.
Zuckerberg continually refuted that video content was becoming a key area of focus for the social media giant, except for as a means to an end for community-building and advertisers. And that means trouble in paradise once again for the many companies, including Tastemade, Popsugar, Nitro Circus and AllDefDigital, that have received up-front funding from Facebook for the Watch tab.
When asked, Zuckerberg reminded listeners to “take a step back” to look at why “[Facebook] is funding lighthouse content” in the first place — to drive community and connection, not to become a video programmer. “We want to start the flywheel,” he said. “Long term, our hope is that the business will primarily be thru revenue shares that normal creators and businesses put into the system. First we need to build behavior where people want to intentionally come to engage with this content.” Long live the days of UGC!
On numerous responses, he reiterated the company’s interest in moving away from a funding model and into a rev-sharing model drawn from advertising, ala YouTube, and even named the streaming competitor as a company that has proven that an ecosystem around user-generated video can work.
“One of the important points here that I tried to commuicate in my comments up front is that connecting with friends and family is more important than just consuming content,” added Zuckerberg. “If you interact with [social video] you build a relationship with that person. You feel more connected to that person,” he said echoing an approach that Ze Frank and Jonah Peretti have championed at Buzzfeed. For Facebook, premium video formats don’t drive community and while a user “might be informed or entertained [she’s] not building social connections.”
The message, although not new, is confusing given Facebook just recently ordered its first scripted format and has forged partnerships with almost every notable media publisher. But, to that end, Zuckerberg and team eluded to increased spend on developing experiences around video, marketplace, and Instagram that foster conversation and community.
“Over the next three years, the biggest trend in our products will be the growth of video,” he said in his prepared statement. “This goes both for sharing, where we’ve seen Stories in Instagram and Status in WhatsApp grow very quickly, each with more than 300 million daily actives, and also for consuming video content. We recently launched the Watch tab, where you can discover shows, follow creators, connect with people watching an episode, and join groups with people with similar interests to build the community. But as video grows, it’s important to remember that Facebook is about bringing people closer together and enabling meaningful social interactions; it’s not primarily about consuming content passively.”
But more pointedly, in the coming short-lead time, Facebook will only fund content in order to power the machine, train user behavior and glean data on which formats work for advertisers and in driving conversation.
Beyond that, publishers should be prepared to hunt down the next big buyer, because the Facebook well will inevitably run dry.