Facebook has quietly formed a team in Los Angeles to poach talent from YouTube, which has cornered the market on people who want to make a living through online video, according to the Wall Street Journal.
Previously, video developers would promote themselves via social media sites like Facebook and then link to their content on YouTube, which splits advertising revenue with anyone who uploads a video.
Facebook, until recently, has had only a modest video business. For comparison, YouTube accounts for 20% of the entire online U.S. video ad market.
Facebook had been working on the video project for at least sixth months, prompting speculation that Facebook will be launching an ad product by the end of the year,
the Wall Street Journal says.
Earlier this week, The
Guardian reported that Facebook had been courting some of YouTube’s top multi-channel networks (MCNs). MCNs help video performers and creators with business-side functions like cross promotion, sales, funding and audience development in exchange for advertising revenue.
In addition, Facebook recently told Variety that it would soon be adding two new features to its videos: a view counter and a “related videos” feature — both of which are characteristic of YouTube.
But if Facebook is to be successful at becoming a go-to place to stream videos online, it must be able to seduce MCNs and their most popular performers to get them to choose Facebook over other video providers such as Vine, Yahoo and YouTube.
Content providers have already been using Facebook to promote their videos on YouTube, but there’s often no money in it. There is no way for someone to let an ad run on a video they have placed on Facebook, and take a cut of the revenue that generates.
Facebook is currently discussing with video content creators how advertising may be included in their videos, the WSJ says. GoPro is one company having meetings with Facebook about video ideas.
Facebook’s main advantage is its newsfeed. It offers a strong platform for content providers to build up loyal fan communities. Fans can see performer’s videos in their newsfeeds without having to actively search for them. Plus, people are more likely to spend time scrolling through their newsfeed than YouTube’s homepage.
But a potential pitfall is Facebook’s “graph search” function. It’s easy to find videos on YouTube because Google has an amazing search engine behind it. Search on Facebook is … in development.
The Journal reported that Walt Disney’s Maker Studios and Collective Digital Studio have been testing videos Facebook. Anonymous sources told the Journal that the “traffic was very, very promising.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.