While Facebook Watch hasn’t yet made Facebook a key competitor in the digital video market, the ad potential of video-on-demand services is huge, and Zuck and Co. won’t be giving up on their chance to take a piece of that pie without putting up a significant fight.
Last week, it was reported that Facebook is working on a new, TV-connected video device, which would not only enable consumers to view Facebook Watch content on their home TV screens, but would also enable streamlined connection to third-party VOD providers, like Netflix and Disney – the latter of which will soon launch its own digital subscription offering.
And now, Variety reports that Facebook is launching a new test of a re-selling partnership with several VOD providers.
As per Variety:
“The social giant is launching what it’s describing as a small-scale test to sell subscription VOD services directly to users. Initially, the Facebook video subscriptions will be available for four services: BBC and ITV’s BritBox, CollegeHumor’s Dropout, MotorTrend App and Tastemade Plus.”
Variety says that Facebook will process payments on behalf of its VOD partners, though the company declined to say whether it’s taking a cut of the revenue during the test period. The new test will only be available to users in the U.S. and will be rolling out over the next few weeks.
It’s an interesting first step towards an expected larger play from Facebook – which, as noted, would eventually involve the sale of its own set-top box-like device that would connect your home TV set to your Facebook profile.
That device – reportedly code-named ‘Catalina’ – would essentially be an extension of Facebook’s Portal smart speaker hardware, which enables users to make video calls through Facebook’s systems from a camera mounted on the tool.
Portal hasn’t been a big seller thus far, with many pointing to increased privacy concerns as a key impediment – but if Facebook could provide a cheaper, more functional video connectivity device, combined with Portal functionality, that could help it start to shift more units, while also providing a whole new opportunity to get Facebook Watch on home TV screens.
And that’s actually more important than many realize. While an increasing number of people are consuming video on mobile devices, the capacity to watch longer-form, episodic content on larger TV screens remains key. Netflix reported last year that 70% of its streams end up on connected TVs, as opposed to phones, tablets or PCs, and YouTube has also reported that connected TVs are its fastest-growing segment.
Given this, if Facebook wants to take a larger share of the video market, it really needs to provide better connection to home TVs. And if it can do that by incorporating a range of VOD partnerships, and packaging them into a cheap, competitive bundle, along with a useful connective device, you can bet that the privacy concerns will reduce.
Even with all the press around digital data misuse, convenience – and value – still trumps privacy in most cases.
This new Facebook test is a first step towards testing that notion on a large scale, and it’ll be interesting to see how Facebook goes about rolling out this next stage, and continuing its video push.
If it works, Facebook Watch could still become a major video player. There’s a long way to go yet, but this is another key element to keep an eye on in Facebook’s steady expansion.