The Wall Street Journal reports that Facebook is going into the next year “willing to spend as much as $1 billion” on original video content, building out the roster of exclusive TV on its revamped video tab Watch.
In June, the WSJ reported that Facebook was willing to pay up to $3 million per episode for centerpiece shows, and was also interested in original sitcoms with episodic budgets in the six-figures. At the time, VP of media partnerships Nick Grudin told The Verge in an email, “We're funding these shows directly now, but over time we want to help lots of creators make videos funded through revenue sharing products like Ad Break.” Eventually, Facebook wants to pay nothing for the original shows, instead offering the creators a 45 percent share of their ad revenue.
Even a $1 billion investment is still a fraction of what Facebook’s digital competitors, like Netflix ($6 billion in 2017) and Amazon ($4.5 billion) shell out, and WSJ reports that the number could fluctuate based on the success of the first crop of shows. However, it’s an aggressive hike from previous investments.
Last year, Facebook put up $50 million to pay celebrities and brands (including The Verge’s parent company Vox Media) to make content for its then-new Live platform. As of April, the company has been touting this as a success, announcing that one in five videos shared on the platform are live-streamed. In May, Facebook announced a new partnership with several media brands — including Vox Media and BuzzFeed — in which it would pay up to $35,000 for episodes of 5- to 10-minute shows that the companies would own and Facebook would get a 45 percent cut of the ad revenue from. The same week, Facebook announced a deal to stream one Major League Baseball game per month. Earlier this week, Bloomberg reported that the company was offering “hundreds of millions” to music publishers in exchange for the rights to songs in the background of user-generated content.
Facebook’s plan is that Watch, and all of the original content it buys for it, will make TV, like everything on its platform, a social experience. Product management leader Daniel Danker said last month, “You discover videos through your friends. You often find yourself discussing videos with friends. Video has this amazing power to bring people together and build community.” All of Watch’s shows have comments enabled and some are incorporated into Facebook Groups.
This news comes a month after WSJ reported that Apple would spend $1 billion on original content in the next year.