Could Facebook Become The New Netflix?

06.26.17 3 months ago 2 Comments

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The rise of peak TV has meant, among other things, that every Silicon Valley company is at least dabbling in making television. Snapchat is bringing a 30 Rock joke to life, Twitter streams football games, and even Apple has a reality show. Really, it was only a matter of time before Facebook got in on the action. But will its ambitious plans pay off where so many others have failed?

The Verge has a look at what Facebook is planning, and they’re spending Netflix money to try and launch this:

The first crop of its original series has been set to launch later this summer (though a source later noted that was a “moving target”), and will have both the runtime and the budget of full-fledged cable TV productions. Thirty-minute episodes will include ads, and Facebook is reportedly willing to pay up to $3 million per episode for centerpiece shows.

What’s interesting here is Facebook is essentially aiming to become a broadcast network, looking a bit more like Hulu than Netflix. Facebook isn’t interested in nudity or profanity, the shows will be ad-supported, and, in a break from streaming tradition, networks will get viewership data to help decide how to sell ads. The main question, though, is “Why should we watch?” and it’s unclear Facebook has an answer.

Silicon Valley has been trying to “disrupt” Hollywood for decades, stretching back to well before Netflix came along. It hasn’t always met with success, but in this particular moment, it’s easy to see why companies like Facebook and Google, whose profits depend on advertising and are flush with cash, think they can come along and become a top-tier “content provider.”

Earning that distinction is a lot harder than it looks. Google is a case in point. YouTube is a website visited by more than a seventh of the world’s population in any given month. YouTube Red, the site’s paid streaming platform which includes benefits like YouTube Music and ad-free watching of all of YouTube, should have been a slam dunk at $10 a month, especially since it was a “young” service aimed at Millennials. Furthermore, YouTube has deep reach, unlike a lot of would-be competitors, with apps on every platform, including set-top boxes and video game consoles. Since YouTube Red’s much-hyped arrival, though, it’s been struggling to be anything other than an also-ran in the streaming wars. It turns out YouTube stardom doesn’t translate out into broader appeal.

From this perspective, Facebook is starting from a deficit it can ill afford to have. Facebook’s video content doesn’t have the relative star power of YouTube — and even YouTube’s biggest stars couldn’t draw audiences — and the social network has struggled to get people to bother with its videos in the first place. Last year, Facebook was busted for “overestimating” its viewer engagement with videos. And that was for short videos like the ones you can already find on YouTube. If it can’t fight YouTube in what that site offers for free, how can Facebook fight Hulu or Netflix?

Beyond that, though, there’s a structural problem. One can argue that Netflix is successful because it does one thing really well: Namely, it delivers interesting TV shows, both from other companies and, increasingly, original productions, that cater to narrow audience segments at a cheap enough price that people are willing to pay for the content. Every other streaming service has essentially done the same — think Hulu’s deep TV library and Amazon’s prestige spending.

Having deep pockets and a huge audience is clearly just not enough to establish yourself as a streaming player. Money is only half the equation when it comes to building a media empire; getting audiences to care is the hard part. Facebook needs to work out why anybody should bother with their content — and quickly. Otherwise, nobody will.

(Via The Verge)

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