Facebook Reportedly Inks Content Deals For Video Service

Reuters reports that Facebook Inc (NASDAQ:FB) has brought on board several content creators (which target mostly millennials) like ATTN, Vox Media, BuzzFeed and Group Nine Media to produce shows for its upcoming video service. There was no official word on the matter from Facebook.

Citing sources familiar with the matter, Reuters adds that Facebook will have both long and short scripted shows with ad breaks. However, the shows, which will be about 5 to 10 minutes, will not be owned by Facebook. The company is likely to shell out $10,000 to $35,000 for each short script show and will be giving the creators 55% share of the ad revenues generated by them. For the shows with duration of 30 minutes (owned by Facebook), the company is ready to spend as much as $250,000.

Facebook remains hawk eyed on boosting “live” video viewing on its platform to bring in more ad dollars. Ad dollars remain the mainstay of its revenues with over 95% contribution. As video ads generate more revenues than its photo and text-based substitutes, Facebook and a host of other social media sites like Snap Inc. (NYSE:SNAP) and Twitter (NYSE:TWTR) are trying to incorporate an increasing amount of video-oriented content to bring in more ad dollars.

Earlier, the social media giant also unveiled a new TV app to enhance video-viewing experience. The app will be initially available on app stores on Apple (NASDAQ:AAPL) TV, Amazon (NASDAQ:AMZN) Fire TV and Samsung (KS:005930) Smart TV, and will be rolled out to other platforms gradually. Also, Facebook hired an ex-MTV executive, Mina Lefevre, to spearhead its video-viewing efforts on its platform.

Facebook recently won rights to live stream 20 Major League Baseball (MLB) Friday night games. The terms of the deal weren’t disclosed.Streaming live sports is a highly lucrative opportunity as it helps to boost engagement levels (especially millennials) and brings more advertisers.

All social media sites are scrambling to get more and more sports-oriented live streaming on their platform. One good example would be Twitter, which, despite failing to win NFL games streaming rights this year, secured rights to offer its users streaming of official NFL video and other exclusive content from the games.

However, stiff competition for ad dollars, especially from Alphabet’s (NASDAQ:GOOGL) YouTube, remains a major concern.

Zacks Rank and Share Price Movement

At present, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has outperformed the Zacks categorized Internet Services industry in the last one year. Facebook’s shares increased 25.59% compared with the industry’s gain of 21.93%.

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