Facebook Puts Live Video Front and Center

By Markets Fool.com


Image source: Facebook.

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There are 100 million hours of video streamed through Facebook every day, but the social network thinks it can do better. Last year it started rolling out live-streaming to its users, and now it's giving them a dedicated place to find all those broadcasts. The newest update to Facebook's iOS and Android apps replaces the Messenger button at the bottom of the screen with a tab for videos.

Users will be able to browse live and archived videos from friends, pages they follow, or find new broadcasters from around the world. Users can also search for videos by topic. The new update is expected to roll out to users over the next few weeks.

With this dedicated video tab, Facebook becomes a much bigger threat to Twitter's Periscope and YouTube, a subsidiary of Google -- an Alphabet company.

Discovery mode
Unlike YouTube, Facebook users come to the platform basically asking for suggestions on things to watch or read from friends or even Facebook itself. While there are some users that love YouTube's suggested video engine, most people visit YouTube with a specific need.

Both platforms work really well for advertisers. Google has made billions off of advertising to web searchers' explicit interests and needs, and the model has translated well to YouTube. In discovery mode, users are much more open to suggested content. Facebook can charge businesses to serve up videos to users when they're already in discovery mode.

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Facebook has experimented with monetization in the past. Its suggested video feed pops up in its mobile apps whenever a user clicks on a video to make it full screen or activate sound. It'll usually play a short video ad before moving to the next video in the queue. But the revenue from suggested videos pales in comparison to other video platforms, despite the huge number of views racked up on Facebook.

A dedicated video tab presents a much better opportunity for monetizing video and producing meaningful revenue for publishers. That's key to attracting more quality content and seriously competing with YouTube. Facebook has reportedly resorted to paying upfront for celebrities to start live-streaming themselves in an effort to increase viewership and engagement with live video. That's a good sign Facebook believes it can eventually monetize video and live streams, but it's probably still well off from attracting content creators from YouTube.

Watch out, Periscope
Facebook's update also includes new features to increase engagement with live video on the platform, and they're basically copied directly from Periscope. Users can now signal their continued interest with infinite likes (or wows, or loves, etc.), and comments now show up in chronological order when users are watching archived videos. Additionally, Facebook is using a map to showcase where its users are streaming from, just like Periscope does.

Periscope has continued to grow despite Facebook's aggressive push into live-streaming. It recently surpassed 200 million live broadcasts, adding 100 million in the last three months. Users watch nearly 3 times as much content today compared to last August. And Periscope CEO Kayvon Beykpour says he's not concerned with what Facebook is doing.

But Facebook has 1.6 billion users around the world, and 90% of them access the platform through its mobile app. As it pushes live-streaming into the limelight of most of those users, Periscope (and others) will be hard-pressed to overcome that kind of exposure. Facebook has the added benefit of not requiring users to download another app. While Twitter recently integrated Periscope streams into its flagship app, users still need to sign up for Periscope to engage with the broadcasters or live-stream themselves.

Facebook also appears closer to a revenue-sharing strategy than Periscope. As mentioned, it's still well off from producing meaningful revenue directly related to videos, but it's clearly moving toward that goal. The dedicated video tab is an indication it's getting closer.

The article Facebook Puts Live Video Front and Center originally appeared on Fool.com.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.