Reportedly, Facebook (NASDAQ:) acquired streaming rights to all episodes of Buffy The Vampire Slayer, Angel, and Firefly from Twenty-First Century Fox (NASDAQ:) . The classic shows are available to U.S. users for free on Facebook Watch from Nov 30.
Facebook is looking to boost watch time and engagement levels by bringing these classic shows, which have a dedicated fan base. These users are likely to engage in repeat viewings.
Facebook is also boosting Watch’s original content portfolio. Earlier this year, the company ordered a 10-episode series named Limetown, following the recent release of Sorry for Your Loss. Reportedly, Facebook is also working on Catherine Zeta-Jones’ dark comedy, Queen America.
Additionally, the company believes that its co-viewing feature – Watch Party will enhance social viewing and user interactions, thereby increasing the time spent on the platform.
Notably, more than 50 million users co-viewed videos for at least one minute a month on Watch in the United States. Moreover, the total time spent by a user on watching videos on Facebook has increased 14 times since the beginning of this year.
Facebook, Inc. Revenue (TTM)
Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote
Facebook is also expanding its reach into live sports by inking deals with the likes of Union of European Football Associations, Major League Baseball (MLB) and La Liga. This is expected to keep users glued to the platform as companies like Twitter and Amazon (NASDAQ:) are also betting big on live sports.
Notably, Twitter currently has deals with the likes of MLB, MLS and Activision to air its Overwatch League among others. Additionally, this November, Amazon bid for Fox’s 22 regional sports networks (RSNs), including New York-based YES Network, worth about $25 billion.
The video push will also let Facebook tap the digital video advertising industry, which is expected to be more than $22 billion by 2021, per eMarketer. Video ads are expected to bring in additional ad dollars (98.6% of total revenues in third-quarter 2018) apart from messaging and Stories ad revenues there by slowly diversifying revenues from News Feed ads.
Competition Woes
Netflix (NASDAQ:) is expected to spend $13 billion and Amazon is expected to spend more than $5 billion in 2018 alone.
This dwarfs Facebook’s spend (up to $2 billion for 2018) to create and produce content, which is investing small amounts and is selecting hit shows instead of jumping on the original content bandwagon, unlike other streaming companies.
Moreover, Netflix’s steady growth in user base given its award winning content remains a concern for Facebook. Notably, Netflix had more than 137 million subscribers globally as of third quarter 2018.
Further, entry of big names such as Apple (NASDAQ:), Disney, Walmart (NYSE:) and AT&T (NYSE:) among others is expected to further increase competition.
Despite all these headwinds, increase in time spent by users to watch videos and Facebook’s efforts to bring in content that will keep its user base (2.6 billion) engaged is encouraging.
Facebook currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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