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Just about everyone is trying to sell you streaming video. Now add Facebook to that list.
Starting Thursday, the social network will let some users buy subscriptions to a limited set of offerings from video providers that include Tastemade and CollegeHumor.
Facebook wants its users to pay it directly for the subscriptions, which they can also buy plenty of other places. Facebook and its partners hope they can convert a portion of the platform’s huge audience, which consumes video and other content for free, into paying customers.
Facebook won’t say how much it is charging video companies to sell their stuff. But Larry Fitzgibbon, the CEO of Tastemade, says Facebook is providing “similar economics” to other platforms that sell its Tastemade Plus service, like Apple. So assume Facebook is keeping around 30 percent of each monthly subscription it sells.
This is the project Recode users learned about last fall, when we reported that the company was trying to put together deals to sell subscriptions to video offerings from big TV players like HBO and Showtime. Selling other people’s videos has turned into a big business for Amazon, and it’s the core of Apple’s new video plan, which it is set to kick off this fall.
But there’s no HBO, Showtime, Starz, or any other big, traditional TV brand in Facebook’s launch today. (The cable programmer Discovery is participating, but it’s not selling access to any of its traditional networks; instead, it is offering the MotorTrend App, an online-only service.) Facebook reps are careful to describe this as a limited test, which will only be available to US users; they say they are open to working with other video companies down the line.
The most logical explanation for the small selection of video Facebook is selling today: HBO and the other big networks would demand guaranteed payments from Facebook, in the neighborhood of hundreds of millions of dollars.
And while Facebook — which just agreed to pay the US government a $5 billion fine for privacy violations — could certainly foot that bill, the company’s approach to video spending seems all over the place: On the one hand, it has made significant bids for the rights to stream Indian cricket matches; on the other hand, it has refrained from spending huge sums to create its own original programming, like Netflix, Amazon, and Apple are all doing.
This move does sync up with another Facebook strategy: While the company has always insisted that its main product will be a free, ad-supported social network, it is increasingly interested in inserting itself between its users and people who want to sell its users something.
Facebook is very interested in growing Marketplace, its Craigslist competitor, which currently doesn’t charge anything but could certainly build in a revenue component at some point. And of course the company is making a big push for libra, a global cryptocurrency project that would also see Facebook create digital wallets for all of its users, so they could send money to other users or businesses on Facebook. This one is also supposed to be free, but it’s easy to see how Facebook could create a giant new business by adding on fees for certain features.
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