Facebook is getting ready to “add” some new friends from the music industry to its revenue portfolio. In a recent move to expand in the direction of video development, Facebook is pushing to become the top website offering online video, as reported by The New York Times on Friday.
The number one social network – based on the users’ headcount – has Google’s YouTube platform as its major rival, and they are both competing for furthering their online ad spending.
Facebook is reportedly in talks with Universal Music Group, Sony Music Entertainment, a Warner Music Group and others, trying to persuade them to add to the growing list of publishers that chose to upload videos directly on Facebook.
Online content and music videos coming from Sony and Universal is shared via Vevo, a venture co-owned with Google and Abu Dhabi Media, a channel that’s become rather popular on YouTube and other music platforms.
But Vevo is not by far the one bringing the big money for YouTube, as only a small 3 percent fraction of the billions of videos played each day on the music platform come from it.
According to online media industry analyst Victor Anthony of Axiom Capital, Facebook’s chance on dipping in YouTube’s revenue rests on a bigger prize: advertisers’ transition from television to digital.
Anthony explained that audiences are moving fast from watching television – and helping advertising companies make money off of it – to being exposed to ads via digital media. Advertisers, however, are slower to do so, and the shift is still going slow, as marketers still doubt about the digital’s ability to deliver in comparison to TV.
But in spite of anyone’s disbelief, digital video ad spending has been spiking in recent years. Even though tracking the actual number of video plays that happen daily across the vastness of the Internet, Facebook’s figures show that its video views have surged with 75 percent between the summer of 2014 and April 2015.
According to inside sources briefed on negotiations between Facebook and the music labels, Facebook intends to sign with them, introduce select music videos directly on the platform and then monitor their views through the end of this year.
And Facebook has good reason to be hopeful about what those reports will look like, as its daily video views have quadrupled to 4 billion this April from last summer. YouTube, however, is still definitely in the lead boasting 7 billion views each day. Projections estimate those views will increase with about 14 percent by the end of the year, reaching the mark of 8 billion.
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