Creating a digital video empire is an aspiration of Facebook. And the company doesn’t conceal it. Recently, the WSJ reported that it’s going to invest more on online video ads.
Facebook made several efforts to improve its video strategy. And they include making deals to create digital TV shows and the launch of Facebook Watch tab, where you can find the company’s original content.
It’s obvious that the company is willing to spend billions of dollars on video. However, sources told The Wall Street Journal that there’s an estimate of how much money the company is willing to pay to reach its goal.
The WSJ reported that Facebook is preparing to invest as much as $1 billion on original video content. But the number may change depending on the performance of the shows.
The latest report came months after the Journal reported that the company would pay up $3 million for every episode for high-profile shows. The said amount is more or less the same as the money spent on top shows on premium cable channels. It’ll also pay $3 million on original sitcoms and scripted shows.
It’s a massive investment for the company considering that it might pay $250,000 for 30-minute scripted shows when it made a deal with Vox Media, Group Nine Media and Buzzfeed for online programming that could fill the Facebook Watch list. Short-form programming would have $10,000 to $35,000 budget.
Another tech giant that’s gearing up to gain digital video viewers is Apple. Recently, Apple was reported to spend almost $1 billion on original TV shows next year.
Both companies have enough cash to invest in video. Unfortunately, they money they’re going to spend is nothing compared to Netflix’s $6 billion investment in original programming this year. Amazon, on the other hand, spent $4.5 billion.
But Facebook made mostly small investments for original and exclusive TV programming. It obtained rights to unscripted series, like a reality show and docuseries. Then, it’s looking to secure rights to scripted shows aired on traditional networks. It also made deals for streaming live sports, such as European soccer and MLB games.
Is it paying off though?
For Netflix, experts believe that its investment in original content is paying off because it focuses on high-quality content. Its subscribers are willing to pay because of its original programming.
But all companies have to remain its competitive edge because the market is getting crowded. In the future, they have to continue focusing on content and profitability as the key determining factors in evaluating their investments.
Netflix is still the best original content media company. HBO occupied this spot for several years, but it now landed on the second place.
Companies are increasing their subscription rates for a significant group of users. Original programming ensures that subscribers will be loyal to these companies even though they would raise their prices.
But Netflix is winning the game. Regarding content acquisition, it spends the highest compared to its competitors in recent years. However, the investment is paying off, allowing it to retain and improve its subscriber base.