• Facebook’s Move to Deemphasize Video in News Feed Has Consequences

    Facebook CEO Mark Zuckerberg’s announcement last week that the company is modifying its News Feed to reduce professional content’s prominence gained a lot of attention. But one surprising result of the move emerged over the weekend: in a Wired interview, Facebook’s VP in charge of the News Feed, Adam Mosseri also said that going forward there will also be less video in users’ News Feeds.

    The move seems to undercut Zuckerberg’s repeated assertion over the past year and a half that the company intended to pivot to be “video-first.” Back in July, 2016, on its Q2 ’16 earnings call, Zuckerberg said that “We see a world that is video first with video at the heart of all our apps and service.” Zuckerberg has reiterated the importance of video on all earnings calls since then and Wall Street has gotten the message: on its Q3 ’17 earnings call in November, 2017, 8 of the 11 analysts who asked Zuckerberg questions focused on trying to understand the company’s video strategy.

    But now Facebook is sending a different message. In the Wired interview, Mosseri said that while “video is an important part of the ecosystem” and that “it’s been consistently growing,” it’s “more passive in nature” and “that there’s less conversation on videos, particularly public videos.” That dynamic is at odds with the renewed emphasis on the News Feed “as a place where people have conversations, where they connect with people.” Going forward, more weight on what appears in the News Feed will be placed on long vs. short comments and on comments generally vs. likes.

    So at a time when video is more central to the online experience than ever, Facebook seems to be saying it doesn’t want to play a central role in this shift. That’s a setback in particular for publishers who were banking on Facebook traffic to drive viewership and monetization (though Facebook had not yet fully enabled this critical piece).  

    It also further clouds Facebook’s already murky strategy for how to become more important player in the burgeoning video industry, where Netflix, Amazon and YouTube dominate. Facebook’s Watch tab has emerged over the past 6 months as its most prominent initiative (supplanting live-streaming, the previous top priority).

    But Watch is a totally different, destination-oriented, use case for Facebook, that is still unproven. And driving users into Watch depends, to some extent, on promotion in the News Feed. How will content providers react if they learn that Facebook will not support aggressive News Feed promotion of their shows because it’s misaligned with the new News Feed strategy?

    All of this underscores the gap between Zuckerberg saying he wants Facebook to become video first vs. the company actually making it a reality. All the while, one of the main goals for why Facebook wanted to be video first - to tap into TV ad budgets to keep its top line revenue growing strongly - will remain elusive.

    Facebook needs users engaging with premium video to drive this part of its ad business. Last week’s News Feed change seems to make achieving the video ad goal even harder. That’s something Wall Street will no doubt be asking a lot about on Facebook’s next earnings call.