Sometime in the near future, it will be difficult to tell where Facebook ends and everything else begins. Facebook and the social network functionality it represents is morphing into a universal filter for user needs and wants.
Facebook’s decision to stream Warner Bros. films in a limited $3, 48-hour window is the most recent dramatic example of how social media is fast becoming the new search. When friends recommend movies, TV programs, books and products, they will be conveniently accessible through Facebook for a price.
The related interaction and transaction generated will create new value for all concerned. Users get only what is personally relevant to them. Advertisers and marketers get connections to targeted consumers. Friends get an intimate global platform for integrated social, hyper-local, mobile communications, commerce and video.
It’s hardly a coincidence that the same day Warner Bros. film arrangement was announced, Google’s YouTube acquired Next New Networks to keep pace with intensified streaming video competition from Netflix, Amazon, Hulu and, now, Facebook. Online video’s dual revenue stream will include about $2 billion in related ad spending in the US this year, according to eMarketer.
Each of these video distributors has some social element, with Amazon being the most sophisticated and effective. But that’s not the same as the consummate social network integrating streaming video and other commercial propositions into its mix—which is why Netflix stock continues to plummet. That’s how quickly Facebook disrupts the new status quo. What began as a calling post for college friends will become a framework for monetizing interactivity something most traditional and even newer companies have been loath to accomplish within their unsocial structures. Even relative newcomers such as Microsoft and Yahoo have legacy organisations that do not easily adapt to Facebook’s new social network order.
Because Facebook is only all about the connections, it already is generating $3.8 billion worth of merchandise for retailers with storefronts (according to SoftPrice.com), more than $2 billion in anticipated display ad revenues this year, and billions of dollars of commerce virally percolating through its social graph without the company even breaking a sweat.
Of course, the proposition cuts both ways. The more that Facebook reaches for new commercial applications to capitalise on its exploding global member base, the further it strays from its original, simple value proposition. According to founding CEO Mark Zuckerberg, Facebook was intended as an application for members (now 600 million-plus strong) to control and share some information and stay connected with their friends and family. Sure.