Facebook is keen to take on YouTube as a distribution network for online video, and has reportedly been courting some of the latter’s top multi-channel networks.
MCNs including Maker Studios and Collective Digital Studio have been testing uploading some of their shows directly to Facebook, according to the Wall Street Journal.
Its report claims Facebook has hired staff in Los Angeles to court these companies and their stars, and also that the company is working on new advertising units to compete with the revenues they would receive from YouTube.
The WSJ quotes a pair of MCN executives praising the distribution tests, which have been running for about six months. “The traffic is very, very promising,” said one. “We’ve seen tremendous reach,” added the other.
Facebook joins Yahoo in hoping to compete with YouTube as a distribution channel for MCNs and their stars. In March, Yahoo was reported to be trying to sign up individual YouTubers and their networks for its Yahoo Screen service.
The competition is no surprise. Analyst firm Jefferies Franchise Note recently claimed that YouTube’s advertising revenues will rise from $5.9bn in 2014 to $8.9bn in 2016, as more brands divert money away from broadcast TV to online video.
Research firm eMarketer expects YouTube to make more money from advertising this year – $7.2bn. The site currently attracts more than 1bn viewers a month watching 6bn hours of video, having spawned an array of new stars, and MCNs to manage their channels.
The top 100 YouTube channels generated 9.46bn video views in July 2014, up 80.5% compared to the same month a year before, reflecting the growth for the biggest channels on Google’s video service.
Even for Facebook, competing with YouTube is a tall order, but the social network’s own burgeoning ad business may be its main selling point for creators: in the second quarter of 2014 alone, Facebook made $2.68bn from advertising, up 67% year-on-year.
The company has other levers to pull, too. The Wall Street Journal’s report includes an interview with YouTuber Jack Vale, who claims that Facebook posts designed to send people to watch videos on YouTube “tend to perform poorly in Facebook’s algorithm”.
The implication is that uploading videos directly to Facebook may reach a wider audience, even if it is early days to judge how the likely income will compare to YouTube.
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