• Facebook Further Positions Itself to be a Major Player in Video

    At Facebook's F8 developer conference yesterday, the company announced a series of initiatives that, taken together, demonstrate it is positioned to be a very big player in video and YouTube's biggest competitor long-term. Following are the most important announcements and my take on their implications. I also note the key missing pieces that are almost certainly on Facebook's video roadmap.

    1. APIs - Facebook released APIs that allow publishers to have much greater control over how they publish videos to Facebook. These include improved tagging, larger file sizes (up to 1.5GB), resumable uploading, real-time encoding updates, scheduling and take-down settings, custom thumbnails, playlist management, audience restrictions/targeting and video staging.

    Facebook announced that 10 online video platform companies have already integrated the APIs, meaning thousands of premium publishers, with large volumes of video, now have more robust access to post on Facebook. This is a crucial building block to bringing more premium video onto Facebook and experimenting with new forms of social engagement (Brightcove has a great example about AMC in a blog post).

    One important thing to note, however, Facebook hasn't enabled video advertising to run against these videos yet; no doubt this is just around the corner (see below). In addition, despite Facebook's API progress, director of product management for video, Fidji Simo noted that Facebook still has a lot left to build, particularly to support live-streaming video and better copyright protection tools.

    2. Embeddable video player - Facebook has finally resolved a long-standing deficiency - how to easily share, outside of Facebook - a video a user or publisher has posted. Facebook's new embeddable video player enables this easy sharing, putting Facebook video sharing on a par with YouTube, whose reach benefits immensely from social sharing.

    Facebook is now generating 3 billion video views per day, and said 53% of them come from sharing. So enabling embedding is a recognition that reaching beyond its borders is a key opportunity to grow viewership through sharing still further. As it enables video advertising, it will no doubt syndicate video ads just as YouTube has done so successfully.

    3. LiveRail officially extended to in-app mobile display ads and gets Facebook data - LiveRail, which Facebook acquired last July, had previously said it planned to extend its video supply side platform to in-app mobile display ads, and yesterday, Facebook made it official. This means that publishers can manage their ad operations across video and mobile for both direct-sold ads and from programmatic sources. Importantly, LiveRail has also added Facebook's anonymized user data to enhance ad targeting across its user base. Initial partners for user-based targeting include A&E Networks, Dailymotion and Univision.

    With the moves, Facebook will become a bigger player in mobile programmatic display (note, 65% of Facebook's video views are mobile), positioning the company to help unify publisher ad operations across video and mobile, tapping into additional revenue. By marrying Facebook's data and enhancing analytics, the goal is to optimize the value of publishers' inventory across devices and formats.

    4. Spherical video - online video's next frontier - In his keynote, CEO Mark Zuckerberg forecast that 5 years from now, video will the THE key medium for sharing, eclipsing both text and photos. Zuckerberg envisions "spherical video," which is captured by up to 24 cameras, as being the next big thing for video. He sees users immersing themselves in these videos by manipulating their viewing angles. These videos will now be supported in Facebook's news feeds and with an Oculus headset will be even more immersive.

    Despite his enthusiasm for the merging of video and virtual reality, Zuckerberg characterized spherical videos as "futuristic." There's been a lot of attention to 4K in the video industry, which is mainly valuable for longer-form sports and entertainment content. One of big benefits of spherical video could be for shorter formats, such as travel, music and social, all of which are key strengths for Facebook. These could also be distinctive ad opportunities for Facebook publishers' videos as well, driving higher CPMs.

     5. Pre-roll ads - huge opportunity, but not yet - For publishers, Facebook is still mainly a way to tap into its huge 1.4 billion user base for engagement, with the idea that revenue is generated elsewhere. For example, Simo repeatedly highlighted the "call to action" capability at the end of publishers' video in her remarks. What's still missing, as noted above, is direct monetization of publishers' videos on Facebook, via pre-roll ads.

    Last year Facebook introduced auto-play ads in news feeds so that video advertisers can reach Facebook users. Now, with the advances in publishing premium videos to Facebook, it seems like natural that publishers will be pushing to fully monetize those videos. Especially given Facebook's deep understanding of users' behavior, the targeting and personalization potential for pre-rolls seems enormous. It's hard to believe publishers are not pushing hard to be able to monetize their videos on Facebook with ads. I see this coming just around the corner.

    (Note: LiveRail and Facebook are sponsors of the June 16th VideoNuze Online Video Advertising Summit in NYC and will be hosting a session discussing their video advertising initiatives. Register early to save and to win a 55-inch Roku TV.)