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IT firms to spend billions on original video content
October 15, 2017, 4:14 pm
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Facebook has joined the ranks of Amazon, Netflix and Apple in spending billions on buying original video content. Facebook recently announced that it is going into the next year “willing to spend as much as $1 billion” on original video content, for its revamped ‘Watch’ video tab.

Facebook’s plan is that Watch, its original video-viewing hub, and all of the original content it buys for it, will make TV, like everything on its platform, a social experience. As far back as last June, it was reported that Facebook was willing to pay up to $3 million per episode for centerpiece shows, and was also interested in original sitcoms with episodic budgets in the six-figures.

Vice President of Media Partnerships at Facebook, Nick Grudin, said, “We're funding these shows directly now, but over time we want to help lots of creators make videos funded through revenue sharing products like Ad Break.” Eventually, Facebook wants to pay nothing for the original shows, instead offering the creators a 45 percent share of their ad revenue.

Even a $1 billion investment is still a fraction of what Facebook’s digital competitors, like Netflix ($6 billion in 2017) and Amazon ($4.5 billion) shell out. Last year, Facebook put up $50 million to pay celebrities and brands to make content for its Live platform. As of April, the company has been touting this as a success, announcing that one in five videos shared on the platform are live-streamed. Earlier this month, it was reported that the company was offering “hundreds of millions” to music publishers in exchange for the rights to songs in the background of user-generated content.

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