Those involved in video production are set to be given access to a new source of revenue, with Facebook preparing to give creators of videos a slice of the revenue generated by ads that run before or during videos. This move represents a new departure for the world’s largest social media platform, given that Facebook has never shared the revenue it generates from video before. It may also represent a challenge to YouTube in the drive to attract video creators to use particular platforms.
Dan Rose, vice president of partnerships at Facebook, told tech news website Re/code that many of the company’s partners have told Facebook that a revenue sharing arrangement “will be a big motivation to start publishing a lot more video content to Facebook.”
The sharing of revenue is limited to a newly introduced feature on Facebook known as Suggested Videos. The new feature is a sub-section of the news feed. If a user clicks a highlight in a particular category under News Feed – sports, for example – that video might open in Suggested Videos, which, in turn, would display other highlight videos in the sports category.
The revenue split decided on by Facebook is purportedly the same as that employed by Google-owned YouTube. Under that arrangement, the creator of the video gets a 55 per cent share of the revenue. The remaining 45 per cent goes to the host platform – in this case, YouTube or Facebook. The difference between the two platforms, however, is that ads will not play on Facebook in the same way that they do on YouTube.
With the Suggested Videos feed feature, users may find that an ad is interspersed between three or more videos. The 55 per cent revenue split will have to be divided between those different creators. The breakdown of the share in revenue will be determined by how much of the respective videos a particular user viewed.
Facebook is currently testing Suggested Videos, and the test phase is expected to last for a few months. The company is yet to determine some of the finer details of how the feature will work, including how it intends to charge advertisers.