Facebook To Split Revenue With Video Creators

by | Feb 23, 2017 | Digital Media | 0 comments

Facebook announced today that they are introducing a new feature into their ad platform for video creators. Ad breaks will allow creators to earn a 55% cut of revenue generated from ads that are displayed within their video content, with Facebook keeping the other 45% of revenue. Ad breaks are currently only in a testing phase on available to select advertisers.

According to TechCrunch, “On-demand video publishers will get to select where in their video they want to insert an ad break, but it must be at least 20 seconds in and at least 2 minutes apart.”  Facebook is constantly looking for more ways to increase their user base and user engagement, but are particularly focused on video and live video. Adding in a revenue share system will likely help Facebook bring new eyeballs to their platform, increase video content creation, and at the same time take away from viewers from platforms like YouTube and Snapchat.

Last week, I was reading an article on theScore about LaLiga, Spain’s Premier Soccer League, announcing that they will begin live-streaming football matches through Facebook Live. LaLiga, is hoping to raise overall viewership, as they have seen their TV viewership decline, and compete with the English Premier League (EPL). As an avid soccer fan, I was delighted by this news as it can sometimes be difficult to watch European matches on TV; at the time I wondered to myself how LaLiga will recoup the lost advertising dollars it would normally generate from TV. It seems as if Facebook has an answer to my question with the introduction of ad breaks.  LaLiga is the seventh highest revenue generating sports league globally and the third highest revenue generating soccer league. It also hosts two (Real Madrid & Barcelona) of the top three most valuable sports franchises on the on the planet, behind only the Dallas Cowboys.

This isn’t the only case of a major sports league or sporting event using social media to live stream events. According to Reuters, Facebook is in talks of live streaming one MLB game per week.  This past weekend, Showtime also live streamed a highly anticipated boxing match on Twitter.

As eyeballs continue to shift to mobile devices and social media platforms commanding large audiences, it will be interesting to see how sports leagues and TV networks maneuver the digital waters to reach their audiences without losing ad revenue.