Facebook Looks To Make Videos More Interesting, Adds Tools

Facebook Inc. (NASDAQ:FB) recently launched two tools for video creators — Sound Collection and the 360 Community Page.

Per a blog post by the company, the video editing tool Sound Collection offers users a number of free high-quality audio tracks and sound effects for creating videos and sharing them on Facebook and Instagram.

Facebook intends to expand the collection by adding new tracks and sound effects. It is also set to launch discovery tools that will enable users to know about various artists, follow them and browse the best-suited sounds for their videos by genre, mood, length and vocals.

Facebook also launched a new 360 community page by partnering with Blend Media that offers tools for making 360 degree videos. The page covers tutorials on everything related to 360 video productions. The company claims to have shared over a million 360 videos on the platform since the launch of the feature in 2015.

Facebook also introduced its new Camera Loaner Program, by which users will be able to borrow cameras directly from Blend Media. The company will initially be lending the GoPro Fusion and ZCam S1 but eventually more cameras will be offered.

A page for editing videos called 360 Director has also been launched for both Pages and profiles.

We believe Facebook’s video efforts will continue to pay off big time.

Notably, Facebook has gained 55.6% year to date, substantially outperforming the industry’s 24.5% rally.

Video – A Key Growth Driver

Facebook intends to capture the opportunity presented by ever-increasing video viewing on social media platforms. Facebook had earlier noted video to be a “megatrend” on the same lines like mobile.

Talking about its video efforts, on the last conference call, CEO Mark Zuckerberg mentioned, “video can serve as a touchstone for building community and helping facilitate interaction, then that's the thing that we feel like we can uniquely do that.”

The company believes that over the next three years videos will be the key growth catalyst among all its product lines. Moreover, per the company, interactions and comments are 10 times more for live videos compared to other videos.

In November, Facebook launched Creator App for creators to “manage their presence” on Facebook. In August this year, Facebook unveiled a new tab called “Watch” that will be exclusively dedicated to video viewing. The company is also increasing investment in producing more video content for the Watch tab.

Facebook has also launched a website for creators, which will assist creators to “find resources and tips on how to create great videos, connect with fans, and grow on Facebook.”

By bringing more video content, Facebook is trying to bring in more ad dollars, which remain the mainstay of the company’s revenues with over 95% contribution.

Moreover, online video is the most lucrative component of digital advertising.

As video ads generate more revenues than its photo and text based counterparts, Facebook is trying to incorporate more and more video-oriented content to bring in more ad dollars.

Zacks Rank & Key Picks

Facebook carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include IPG Photonics Corporation (NASDAQ:IPGP) , NetApp Inc. (NASDAQ:NTAP) and NVIDIA Corporation (NASDAQ:NVDA) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for IPG Photonics, NetApp and NVIDIA is projected to be 19.7%, 11.3% and 10.3%, respectively.

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