Facebook is Planning on Piloting Video Streaming Subscriptions for Watch

According to an article by Mobile Marketer, Facebook is planning to test paid subscriptions for the first time on its Watch hub. They’ll apply to on-demand shows and include material from CollegeHumor, Discovery’s MotorTrend, the BBC, and selected content from ITV.

Testing is limited to the US and will take place in the next few weeks. Facebook plans to charge monthly fees of $4.99 for CollegeHumor's DropOut, $6.99 for BritBox, $4.99 for MotorTrend and $2.99 for ITV’s Tastemade Plus. Subscribers will have access to original content. Facebook will handle payments on behalf of its subscription video-on-demand (SVOD) partners and is expected to take a cut of the subscription sales.

Paid subscriptions would represent an additional source of revenue for Facebook, which has mostly relied on the sale of ads up until now. However, digital ads are becoming more competitive as more players get involved. Ad-dependent organizations such as Facebook and Google are looking to develop alternative sources of revenue. Consequently, we’re seeing them branch out into e-commerce and subscriptions.


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Source: Facebook News Room

Facebook has looked to compete with the Google-owned YouTube by putting out original content. The social network announced that the audience on its Watch platform had grown by 80%, reaching a respectable 720 million monthly users. That figure is based on visitors who spend at least one full minute on the platform and has risen from 400 million in December 2018. In comparison, YouTube reported 2 billion monthly users in May, which is a figure up from 1.9 billion last summer.

Facebook has tried to expand Watch's programming lineup in the past via the sale of subscriptions to streaming services from major cable networks. However, it’s not known how far Facebook has progressed in talks with the cable programmers concerned.

Reselling outside services isn’t a new approach in the streaming sector. Amazon, Apple, and others dabble in the practice, and it’s known to be lucrative for companies who can expect to grab an estimated 30% commission in exchange. Mobile Marketer reports that Amazon's Prime Video Channel more than doubled its revenue to $1.7 billion last year from $700 million in 2017, and likely collected $500 million from the resale of subscriptions.