BII Facebook is inching closer to TV


Facebook is inching closer to TV

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Facebook users can now watch videos posted on the social platform on their TVs through Apple TV or Google Chromecast, the company announced last week.

This feature strengthens Facebook’s position in the evolving TV ecosystem, and will help the company attract more ad spending relative to traditional TV. Digital ad spend is expected to match linear TV for the first time this year at $68 billion, according to Magna.

Porting Facebook videos onto TV will help the platform siphon even more ad spend from TV budgets by:

  • Redefining Facebook videos as content fit for TV. Facebook videos can now exist on a TV screen in a communal viewing context, and the company wasn’t coy about drawing attention to this aspect. Its own promotional video for this new feature shows a group of five people on a sofa enjoying Facebook videos on a TV. Being able to exhibit creative on large screens and potentially reach multiple people at once makes Facebook more attractive to TV advertisers.
  • Unlocking ad inventory, especially around Live. Facebook’s main video ad product is right now a unit that appears in between suggested videos, after users have watched two or three videos in a row. Revenue from this unit will increase as users spend more time watching Facebook videos on TV. The company is also experimenting with mid-roll ads that closely resemble traditional TV ads, allowing publishers to pause programming for an ad break.
  • Capitalizing on double-screening behavior. When watching Facebook videos on TV, users will be able to use the device that they’re streaming from to check their News Feed and comment on content. According to Nielsen, 62% of North Americans browse the internet while watching videos, and 58% of people do so worldwide. Facilitating this two-screen experience drives audience engagement, and encourages users to stay within Facebook’s platform.
  • Helping Facebook to attract high quality video. Facebook is looking to be a new kind of video platform, where its users and Pages take on a similar role to TV channels. We’re already seeing this happen. Facebook collaborated with multiple news channels to stream the Democratic and Republican conventions and ongoing US presidential debates. Just last week, Facebook collaborated with UK TV channel Alibi to live stream an interactive escape room drama.
  • Positioning Facebook for the future of TV apps. Over-the-top platforms are causing TV apps to grow in prominence relative to traditional TV channels. If it passes, the FCC set-top-box proposal will accelerate this process by forcing pay-TV providers to allow third-party TV apps on their set-top boxes. Apple TV is also charting a future where video apps replace TV channels. Adding support for Apple TV and Chromecast gives Facebook more of a winning position in this emerging future.

Over the last few years, there’s been much talk about the “death of TV.” However, television is not dying so much as it’s evolving: extending beyond the traditional television screen and broadening to include programming from new sources accessed in new ways.

It’s strikingly evident that more consumers are shifting their media time away from live TV, while opting for services that allow them to watch what they want, when they want. Indeed, we are seeing a migration toward original digital video such as YouTube Originals, SVOD services such as Netflix, and live streaming on social platforms.

However, not all is lost for legacy media companies. Amid this rapidly shifting TV landscape, traditional media companies are making moves across a number of different fronts — trying out new distribution channels, creating new types of programming aimed at a mobile-first audience, and partnering with innovate digital media companies. In addition, cable providers have begun offering alternatives for consumers who may no longer be willing to pay for a full TV package.

Dylan Mortensen, senior research analyst for BI Intelligence, has compiled a detailed report on the future of TV that looks at how TV viewer, subscriber, and advertising trends are shifting, and where and what audiences are watching as they turn away from traditional TV.

Here are some key points from the report:

  • Increased competition from digital services like Netflix and Hulu as well as new hardware to access content are shifting consumers’ attention away from live TV programming.
  • Across the board, the numbers for live TV are bad. US adults are watching traditional TV on average 18 minutes fewer per day versus two years ago, a drop of 6%. In keeping with this, cable subscriptions are down, and TV ad revenue is stagnant.
  • People are consuming more media content than ever before, but how they’re doing so is changing. Half of US TV households now subscribe to SVOD services, like Netflix, Amazon, and Hulu, and viewing of original digital video content is on the rise.
  • Legacy TV companies are recognizing these shifts and beginning to pivot their business models to keep pace with the changes. They are launching branded apps and sites to move their programming beyond the TV glass, distributing on social platforms to reach massive, young audiences, and forming partnerships with digital media brands to create new content.
  • The TV ad industry is also taking a cue from digital. Programmatic TV ad buying represented just 4% (or $2.5 billion) of US TV ad budgets in 2015 but is expected to grow to 17% ($10 billion) by 2019. Meanwhile, networks are also developing branded TV content, similar to publishers’ push into sponsored content.

In full, the report:

  • Outlines the shift in consumer viewing habits, specifically the younger generation.
  • Explores the rise of subscription streaming services and the importance of original digital video content.
  • Breaks down ways in which legacy media companies are shifting their content and advertising strategies.
  • And Discusses new technology that will more effectively measure audiences across screens and platforms.

Interested in getting the full report? Here are two ways to access it:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
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