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How Facebook’s Latest Move Could Lead to Live-Streaming Revenue

Facebook Live launched to spectacular hype. In a hefty BuzzFeed feature story, Mark Zuckerberg himself even made a special appearance, giving an overview of why the company was going “all in on live video.”

Zuckerberg began with the proclamation that we are entering a “golden age of video,” predicting that video content will dominate what we see and share on Facebook in the next few years. He then hinted at what makes Facebook Live different from Periscope, Snapchat, or the many other live-streaming options that have come before: reach.

“If you’re a public figure, the audience is unprecedented,” Zuckerberg told BuzzFeed. “If you’re Jimmy Fallon and want to go live, it’s not really worth your time unless you can reach an audience that’s similar to what you can reach on TV.”

Since launching in August 2015, Facebook Live had a unique advantage over other Facebook posts. When anyone you follow—celebrity, brand, friend, or media company—started a stream, you’d automatically receive a notification, whether you wanted it or not.

The system led to massive engagement. When BuzzFeed posted a video of two people putting rubber bands around a watermelon until it exploded, the clip had more than 800,000 concurrent viewers at its peak, reached more than 10 million in five days, and ended up with 320,000 comments. Big numbers! Everyone was impressed. MarketingLand proclaimed that “BuzzFeed’s exploding watermelon video proves Facebook Live is no joke.”

But what if users could opt out of the annoyance of automatic notifications anytime someone in their network posted a live stream? Last week, Facebook started rolling out that very option, according to Digiday. Undoubtedly, many will take advantage.

For a short time, publishers had maximum reach. Then, suddenly, the reach gets curtailed. This story sounds familiar.

In the early 2010s, Facebook was an organic reach goldmine for brands. In 2012, organic reach began to plateau at 16 percent. A 2015 study put average organic reach at 2.6 percent. Now, it’s almost entirely pay-to-play.

Organic_Reach_Chart

A similar pattern emerged with Zynga, the gaming company that built a hugely successful business on Facebook only to see its reach squashed with a simple notification change.

And though there’s no hard evidence, traffic to external referral links for clips from YouTube and other video platforms seemed to drop off as soon as Facebook introduced its own native video player.

The message is clear: Brands and publishers can get their content in front of huge audiences, but only if they play by Facebook’s rules first.

Is Facebook’s new opt-out feature just the first in a line of updates meant to slowly decrease Live’s obtrusive reach? It’s hard to say. But since history likes to repeat itself, don’t be surprised if Facebook monetizes its cool new toy sooner rather than later.

Image by Facebook
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