There appears to be a growing debate after Facebook launched its “Watch” feature in August 2017. The new video portal, now available throughout the U.S., curates Facebook-exclusive video content from programming partners, as well as some content funded by Facebook itself.
With Mark Zuckerberg’s mission to connect billions more people to the Internet in remote areas of the world, telecom operators and programmers could view Facebook and other social media video platforms, like Twitter and Snapchat, as competition. Yet Facebook doesn’t see “Watch” as competition to the telecoms. Instead, they are hoping that “Watch” will be less of a competitor with traditional media and more of an opportunity for publishers and broadcasters to expand their audiences. By offering live sports from the likes of the NFL and MLB, series and creator content they are looking for ways in which “the content and community can come together.” Facebook sees monetization in terms of inserting ad breaks and by building audiences outside of the traditional TV environment.
Either way, it remains to be seen exactly what impact “Watch” will have on the entertainment industry. What it does have going for it is Facebook’s 2 billion users and its ability to capture data on every user. Conversely, the unpredictability of live video, plus the extremely limited amount of content available currently and the difficulty involved in competing with the likes of Netflix in creating original content could be signals indicating “Watch” may be fated for limited success.
Google’s YouTube, which “Watch” emulates, has a key advantage in being one of the original dedicated digital video platforms. Unlike Facebook, consumers of all ages flock to YouTube primarily to watch videos, not to socialize with friends and family. It has been experiencing tremendous ad growth and revenue with more advertisers shifting their budgets from television to online as more viewers prefer to watch their favorite shows on their smartphones and tablets.
In the end, for MVPDs to achieve continued growth and less churn, they will need to avoid being viewed as a “dumb pipe” at all costs in the coming months and years. The buzz-worthy phrase “dumb pipe” infers that the only product telecom providers deliver is nothing more than a simple connection from their customers’ devices to the Internet content that they want to consume. MVPDs have to think out of the box and become “smart pipes” by leveraging existing or unique service capabilities as well as their own customer relationships to provide value above and beyond that of just data connectivity. Once this is achieved, it will be a win-win for all parties.
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