Unpacking Facebook Vs YouTube Battle For Consumer Eyeballs

This week Facebook announced that it would be including mid-roll ads in the videos that show up in its highest value real estate - the news feed. It's a shot across the bow of YouTube to get more of the content creators, both new and existing, to switch from YouTube's walled garden to Facebook's.
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This week Facebook announced that it would be including mid-roll ads in the videos that show up in its highest value real estate - the news feed. It's a shot across the bow of YouTube to get more of the content creators, both new and existing, to switch from YouTube's walled garden to Facebook's.

The reason is very simple: money. The social media celebs of the day rely on YouTube as their main income source. In fact, Multi-Channel Networks (MCNs) cropped up to form a union of sorts that combined the power of these social influencers into a massive media hammer. Disney even bought one for upwards of $1 billion with earn-outs.

Creators make fun videos about make-up or playing video games, or just goofing off. Our friends the millennials subscribe and tune into these short-form TV channels to watch the continued hijinks of Jenna Marbles or PewDiPie. But in return for that ad revenue and for using the tech and CDN bandwidth, these creators have to give up nearly half their revenue to YouTube.

So what did Facebook do? They matched it. Now, a new video creator has the choice of choosing YouTube's existing population and brand while competing against the other big boys and girls, or to switch to Facebook and potential get in front of nearly 2 billion monthly active users.

That news feed is some powerful juju.

But what's the better experience for viewers; the everyday people who use Facebook? The ones who flick, scroll, tap, and flick some more?

Well, Facebook did two things to make it better than YouTube:

  1. They put the ad not before the video you want to watch, but rather after 20 seconds of the video you're already watching.
  2. Forces you to have a video of at least a minute and a half in length.

This is to get around the people who would try to game the system by uploading some weird cat clip that lasts 2 seconds when the ad in front of it is 15 seconds.

But does this matter? Has anyone done a survey of viewer habits to see how they like to watch videos online? Boy are you in luck :)

A few months ago, Piksel conducted a survey of 2,207 people aged 16 to 55+ across the United States and the United Kingdom. It centered around how people discover videos and how they like to watch them.

The interesting aspect of this report is that the vast majority of people like high-quality content, but that there are very real cultural differences at play for different markets.

Remember the TV show The Office? It started as a dry humour British comedy that was recreated for its American counterparts. The actors were different, the story was different and even the comedy was different, even though the same basic premise was the same. This localisation of content across cultures matters and in the future, the creators will need to understand this, whether they're a single person or well-funded studio.

As we move into this new world where the most valuable content for social networks, in terms of ad revenue but also what people want to pay attention to, is video, it means we need to understand where people are going to watch their shows and how they like to watch them.

Sure, we might all "cut the cord", but it doesn't change what we want to watch. At the end of the day, many of us just want to flip on the TV to a channel we trust, enjoy, and let the program play out. We don't want to have to constantly hunt and search for new, interesting stuff to watch.

Just give it to us. Somebody else can do the programming.

There is a fundamental battle raging between two sides that no one understands how it will play out or who will win. On one side you have the big broadcasters with high value movies and TV shows that want to own their destiny, but don't have an audience. On the other side you have social networks with loads of viewers, but no high quality, valuable content.

These two sides might converge at some point, but it comes down to what people want and where the consumers point their attention. Maybe it's social networks during the day and cable at night and a movie once in awhile on the weekends.

Maybe one day we'll see everything converge into one simple place. Log onto Facebook and see the latest Star Wars playing out. We've written about AI sending you a movie in a text message previously, but the end-game is ultimately up to you.

Spend more time on social networks and unsubscribe to cable, then you might see Seinfeld reruns in your Facebook feed. Spend all your time streaming YouTube videos and you might see higher quality content there. Don't trust the social networks and just pay for bundled TV and phone package and you might start seeing real reality TV, aka millennials goofing off in short clips.

The future, my friends, is wherever you put your attention.