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Challenge Thrown To Youtube For Ad Dollars By Launch Of Facebook's Watch

Challenge Thrown To Youtube For Ad Dollars By Launch Of Facebook's Watch
As the number one social media network – Facebook, vies with Alphabet Inc’s YouTube for advertising revenue, it launched its Watch video service to U.S. users on Thursday with plans to allow people to submit shows.
In recent years, there has been a shift among viewers who have migrated to watching shows on smartphones and tablets and therefore advertisers are shifting more of their budgets from television to online mediums.
In addition to live sports like Major League Baseball, hundreds of shows from the likes of Vox, Buzzfeed, Discovery Communications Inc, A&E Networks, Walt Disney Co’s ABC and hundreds of other shows would be able to be watched by Facebook users on Watch which Facebook began testing earlier this month.
According to eMarketer data, going up by more than 7 percent from the figure last year, Americans this year spend more than 73 minutes a day watching digital video online. And in a trend that is expected to continue in the future also, TV watching has dropped 2 percent from last year to 244 minutes a day.
In order to divert interest through some interesting shows, Facebook is initially paying some content creators for such shows. Sources had been quoted in the media in May that up to $250,000 for longer shows, the company is paying $10,000-$35,000 for shorter form of shows.
On the issue of how much it was spending on shows, the company declined to make any comments.
Dan Rose, vice president of partnerships at Facebook told the media that Facebook does not intend to make buying content a core piece of its strategy.
“We are not focused on acquiring exclusive rights,” he said. “The idea is to seed this with good content.”
Rose said that in order to allow everyone to submit shows for approval and share 55 percent of ad revenue, Facebook plans to eventually open up the platform for everyone.
He added that how ads will work within the shows is being tested by the company.
Paul Verna, a senior analyst with eMarketer said that for advertisers, alongside YouTube, the leader in the digital video space, Watch should help Facebook solidify its position in the segment.
Compared to the competitors in the segment, Watch is more personal and community-oriented, Facebook said. For example, friends can share their thoughts as they watch a video and can suggest shows based on a user’s interests.
Putting an example, Rose said that on live CrossFit events streamed on Facebook while chatting in groups, fans of the exercise program “CrossFit” can watch and share commentary.
And on a show called “Hala Madrid,” a show about Real Madrid, fans of Spanish soccer can watch and chat online about the program.
“We think our unique opportunity is around community and engaging with people on topics they love to talk about,” said Rose.

Christopher J. Mitchell

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