Social networking giant Facebook is preparing to enter the video space: it wants to sell consumer subscriptions to cable TV networks such as HBO and hopes they can watch these TV shows on the Facebook app.
The social network is discussing a proposal to sell streaming TV services for these companies on Facebook with pay-TV channels like HBO, Showtime and Starz. Consumers who subscribe to these TV channels can watch —&mdash on the Facebook site. It is likely to be viewed on Facebook's Watch video service platform —— but it may also be viewed on other platforms and devices such as Roku TV set-top boxes.
This is a business model that people in the TV industry are familiar with: Amazon has been doing similar things for years, and Apple is looking forward to doing the same thing next year.
Industry insiders say Facebook's media team has been talking to HBO and other companies about the matter for a few months. The social network hopes to launch the product in the first half of 2019. A Facebook spokesperson declined to comment.
Considering that Facebook's ambitious goal is to become a video center, this will be a logical development path for Facebook and a major business transformation for the company: although Facebook has been involved in e-commerce in the past, it does not sell any directly to consumers. product.
Facebook spent a few years trying to convince media companies to create content for their 2.3 billion users, but in vain. But it also sent a signal that it is willing to pay for high-end programming. In 2017, the company made a bid of $600 million to try to play the Indian cricket match online, but it did not succeed. Last month, the company entered into a partnership agreement with 21st Century Fox to start broadcasting some of the older TV shows, including Buffy The Vampire Sayer.
Industry executives believe that TV show producers are expected to receive advance payments from multi-year cooperation agreements from Facebook, while Facebook will recover costs by extracting partial subscription fees for TV channels. Platforms like Apple and Amazon typically draw 15% to 30% of the subscription revenue.
For Facebook, selling content or anything else to users will be a major change. Facebook's core services have always been free, and almost all of its revenue depends on advertising. But some sources said that one reason why the company is willing to sell pay-TV subscription services is that the company has spent a lot of money to advertise its streaming services on Facebook.