Video Briefing: Facebook Watch remains a mystery for many video producers

The key hits:

• 75 million Facebook users spend at least one minute on Facebook Watch every day. These users also average 20 minutes of time spent per day.
• Facebook’s growth is encouraging, but with less than 3.3 percent of Facebook’s 2.3 billion global users spending time on Watch, there’s still a ton of room to grow.
• Facebook Watch production partners are still confused by what the company is looking to looking for — as Facebook has pivoted a ton of times on its Watch content strategy.
• Facebook says it wants fewer, bigger entertainment shows, with reports indicating that they’re looking for programming that appeals to an older demographic.
• News shows on Facebook Watch, meanwhile, will reportedly see their budgets cut as Facebook looks to spread the $90 million to more shows.
• All of this is leading media executives to believe that Facebook still doesn’t have a clear strategy and is still pivoting and trying to find anything that sticks.

Last week, Facebook released some updated numbers on Facebook Watch: 400 million users spend at least one minute on Watch every month; 75 million Facebook users spend at least one minute on Facebook Watch every day — and of those daily users, the average time spent is more than 20 minutes. (One thing to note, per Axios: these don’t have to be 20 continuous minutes in a single session but can be spread out throughout the day.)

That’s an encouraging number, even if it is nowhere near close to the level of daily usage that YouTube gets. But to look at it in another way: less than 3.3 percent of Facebook’s 2.27 billion users are spending meaningful time on Facebook Watch. Granted, Facebook only rolled out Watch globally on mobile devices in August — and globally on desktops just last week — but it’s fair to say that Watch still has a lot of room to grow.

How it goes about that from a funded programming perspective is still leaving media executives confused.

“There is no one, clear leader there driving the vision — it’s not Ricky [Van Veen], it’s not Fidji [Simo], it’s not [Matthew] Henick,” said a source at one Facebook Watch entertainment production partner.

Facebook executives have been public that they are now focusing on fewer, but bigger shows, especially when it comes to scripted and unscripted entertainment series. Recent announcements include an “MTV’s The Real World” reboot, as well as renewals for scripted shows such as “Sorry for Your Loss” and “Five Points.” Facebook also licensed the full libraries of cult TV hits “Buffy the Vampire Slayer,” “Angel” and “Firefly.” According to CNBC, Facebook has been pivoting to buying and licensing shows that would appeal to people 30 years or older.

This comes after Facebook launched Watch by throwing everything — including the kitchen sink — at the wall. Originally, Facebook bought a ton of unscripted, short-form lifestyle shows — the kind that’s all over the internet and often made by digital publishers. (It’s no longer buying those types of shows). Then, the focus shifted to making shows longer, in a bid to get users to spend more time with each video. Then, Facebook opened Watch to non-exclusive, one-off videos. Around this time, Facebook was prepping the premiere of some high-profile scripted shows such as the Elizabeth Olsen-starring “Sorry for Your Loss” and Catherine Zeta-Jones’ “Queen America.” Facebook also started talking up formats that took advantage of the interactive and community elements of its platform.

And after initially ignoring news publishers, Facebook eventually warmed up to funding news programming, which The Information recently said is undergoing its own strategic shift. Facebook appears to be cutting budgets for individual news shows in Watch in the hopes of spreading its $90 million budget across a bigger number of shows.

In addition to all of this, as Facebook invests more in international programming, sources said they could see Facebook shift budgets even more.

There are still a lot of questions in the air about what happens with Watch in 2019. Even if Facebook says it’s looking for fewer, bigger projects, media sources say the company is still willing to try anything to see if it sticks.

In Facebook’s defense, the company wants Watch to be an ecosystem that has something for everyone — which requires an expansive content strategy. But the constant shifts in priorities have left media partners confused and constantly spinning to pitch something that Facebook would be willing to fund.

If you’re looking for a silver lining, it appears Facebook remains committed to its grand experiment. The company hasn’t closed off funding for Watch in the way it ended its live and news feed video subsidies. And it’s still looking for and hiring video content and programming executives, said one source.

And if Facebook Watch chooses to be the home for programming made for older demographics, there’s a certain amount of sense to that. But don’t be surprised if, in three months, there’s another pivot within the halls at Menlo Park.

Confessional

“You’re either going to need a paywall or a commerce business — I don’t know how you survive as a [media] brand anymore if you can’t do one of those.” — Digital publishing exec

This week on… Netflix
Netflix now plans to release about 55 original movies a year (not included animated films and documentaries), according to this New York Times deep dive on Netflix’s attempt to compete with the film industry. Some films could have budgets as high as $200 million. Netflix’s original films slate, overseen by former Universal exec Scott Stuber, includes movies from Martin Scorsese, Steven Soderbergh and other big names. Netflix, which has tussled with movie theater chains due to its desire to release movies on its streaming service the same day they arrive in theaters, has recently been willing to budge a little on this strategy and release films for a few weeks in theaters first. This is to comply with the Oscars’ eligibility rules, which is something Netflix needs to do if it wants top directing and acting talent.

Similar with how some top TV producers are now producing for Netflix, some film directors are happy to work with Netflix — even if it means a limited theatrical release — because Netflix will pay to get the movie made. Take Alfonso Cuarón’s “Roma,” which is getting a lot of Oscars buzz: the producers approached six distribution companies, of which Netflix was the only one that was not concerned about the black-and-white film’s commercial prospects. Don’t blame the traditional distributors, though; their business model is centered on profitability, whereas Netflix has been given the runway from investors to take on a ton of debt to fund its massive content budget.

Numbers don’t lie
+25 percent: Growth in Facebook ad revenue from national marketers in the U.S. this year, which is slowing — Facebook ad revenue from national marketers was up by 41 percent from 2016 to 2017, according to Standard Media Index.

97: The number of videos shot by The New York Times’ T Brand Studio in 2018, according to the Times’ year-end review.

Going to CES?
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What we’ve covered
ESPN boss Jimmy Pitaro on the future of sports:

• ESPN president Jimmy Pitaro said the company is committed for the long term in building out ESPN+, even as it continues to protect its legacy pay-TV business.
• Pitaro said he views Amazon and other big tech giants as legitimate competitors for live sports rights.

Read more about ESPN here.

Amazon is ramping up its Fire TV pitch:

• Amazon is in the process of staffing up a dedicated video ad sales team to compete for connected TV budgets.
• This is Amazon’s attempt to go after more TV ad dollars.

Read more about Amazon’s TV ads plan here.

What we’re reading
Netflix hires former ABC content exec: Former ABC Entertainment president Channing Dungey is joining Netflix to oversee the company’s content deals with high-profile stars such as the Obamas, Shonda Rhimes and Kenya Barris.

Facebook wants to sell TV networks’ apps on Facebook: Facebook is in conversations with HBO, Showtime and other TV networks with subscription streaming services to sell their apps directly on Facebook. This is similar to Amazon’s Prime Video Channel program, which today has grown to be a huge distribution source for subscription video programmers. According to the report, Facebook’s thinking is that if people are already talking about HBO shows on Facebook, why not give them the option to watch those shows there, too. There’s logic to this, but Facebook also doesn’t have a background in selling anything directly to customers. Then again, inexperience in a particular line of business hasn’t stopped Facebook before.