Facebook has been saying for a while now that video is its future, but we’ve seen little evidence that they’re making progress on that front. Even though annual revenues are now at $17 billion or so, Facebook is yet to fully leverage its audience of 1.8+ billion in terms of video ad revenues.
That day might finally come as Facebook develops a video app expressly for set-top boxes such as Apple TV.
Of course, that’s not to say Facebook hasn’t done anything so far. They’ve been promoting their live-streaming capability Facebook Live, putting video content into Instagram and even testing out new video ad products.
But so far, there hasn’t been much traction – at least, not as much as Facebook might have hoped for.
The new video app initiative is part of Facebook’s long-term strategy to bring in licensed TV programming content in long-form. Such premium content would naturally require a streaming platform such as the one that the company is building so it can be viewed on bigger screens.
Such capability already exists for Facebook Live, where content can be streamed to an Apple TV or Google Chromecast device. But now, Facebook is taking this a step further and going the way of Netflix.
Of course, this is now a crowded space with everyone from Netflix to Amazon Prime Video to HBO Now vying for screen time, but Facebook does already have a massive user base that it can leverage.
And that seems to be the social media giant’s objective – to create a full-fledged TV experience for their viewers so they can increase their potential to serve ads; specifically, video ads.
At their last earnings call Facebook warned investors that it is approaching peak ad loads, meaning it’s already serving as many ads per user as is possible. This new initiative will hopefully extend their ad runway and allow them to grow ad revenues for several more years.
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