But for an ad-supported business like Facebook, views are only
as valuable as the revenue they generate. While YouTube videos
viewed on Facebook contributed some percentage of the
estimated $5.6 billion YouTube reaped last year, Facebook
didn't make a cent.
That may be why Facebook is shining a light on its own video
player privately in meetings with online video execs and now
publicly with its view count. Coupled with its
acquisition of video ad-tech firm LiveRail and
introduction of autoplay video ads, Facebook appears poised to
make a run at YouTube's business. In one big way it already
has.
Facebook's content-recommendation algorithm gives preference to
its own video player when determining what content to show in
people's news feeds, according to several online video
executives.
"Uploading a YouTube link to Facebook is just about death when
it comes to attracting Facebook views or Facebook shares or likes.
They've obviously tuned the algorithm to not be so into YouTube
links," said one online video network executive. In the last few
months that network's videos uploaded using Facebook's player have
seen "hundreds of percentage points increases in views" compared to
videos posted using YouTube's player, the person said.
Generally Facebook's news-feed algorithm gives preference to
content that people consume and share most. When it comes to video,
according to a a person familiar with the matter, Facebook's
news-feed algorithm evaluates a video's likes, comments, shares and
watch time. However Facebook can only measure watch time for videos
posted directly to the social network, not links to other sites
like YouTube. YouTube videos are at a disadvantage because people
need to click to play those clips, whereas Facebook-native videos
play automatically. A video must play for at least three seconds
for Facebook to count it as a view, according to a Facebook
spokesman.
Facebook is capitalizing on its competitive advantage, which
happens to be one of YouTube's biggest vulnerabilities: helping
people find videos to watch.
"YouTube's Achilles' heel has always been discoverability," said
an online video executive.
As more people look to social networks first for content,
Facebook has become a bridge between audiences and publishers,
including YouTube. A lot of people find out about videos on
Facebook and then watch them on YouTube (or within YouTube's player
embedded on Facebook).
A YouTube spokeswoman declined to comment.
Facebook has its own Achilles' heel (beyond the fact that its
videos intially autoplay silently). The social network has tried
for years to get YouTube stars to build their audiences on the
social network. While network execs and creators saw that Facebook
was able to drive views, the social network wasn't showing them a
way to drive revenue. Unlike YouTube -- which runs ads against
videos and gives creators a cut of the revenue -- Facebook does
neither, at least not yet.
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Facebook could flip a switch on a YouTube-style video ad
business, thanks to LiveRail. That acquired company specializes
in appending video ads to clips across a network of third-party
publishers, including Major League Baseball and ABC Family.
A number of online video executives expect Facebook to use
LiveRail to sell ads against Facebook-native videos, describing it
as a matter of if not when. "They will be a big pre-roll
participant," one exec speculated.
Facebook would further help itself by making its videos more
easily embeddable on others' sites to drive impressions as YouTube
has done. The company is working on a way for people to embed
standalone videos a la YouTube, according to a person familiar with
the matter, but right now embedding a Facebook video requires
embedding the entire Facebook post.
If Facebook were to add ads, it could open up a revenue-sharing
program with creators.
Online video networks and creators applaud YouTube for being the
only social network that lets them make money off their content
posted to its service. But some have complained that YouTube
doesn't let them make enough money, citing YouTube's 45% cut of
their ad revenue. YouTube's potential rivals like
Yahoo have tried to seize the shortcoming by offering creators
a more favorable revenue-sharing agreement, but few have made
headway against the video giant.
Facebook would be the biggest company to take on YouTube when it
comes to audience size. YouTube claims more than 1 billion monthly
viewers, and Facebook reported 1.3 billion monthly visitors in the
second quarter. But Facebook lags YouTube when it comes to video
viewership. The social network has averaged
1 billion video views per day since June 2014, but Google's
video service
surpassed 4 billion daily video views in January 2012.
