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Facebook Watch takes on YouTube with pranksters, magicians and cartoons

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Facebook sees Facebook Watch, with its rising number of videos from internet stars, as a key to future growth.

New York

A 20-SOMETHING magician performing on the streets of Thailand and Jamaica. Three Australian brothers who shock bystanders with devious pranks. A conservative commentator in Mississippi who rants about America's priorities from his car.

These are some of the video-makers who in recent months have started making serious money from Facebook Watch, the tech giant's answer to YouTube.

Julius Dein, the magician, said his videos had attracted revenue in the "six figures" since July, when he became able to run ads on them. The prankster brothers, known as the Jalals, said they had earned more than US$500,000 since August.

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While Facebook grapples with growing regulatory scrutiny and a string of crises around data misuse on its platform, its ambitious growth plans have not slowed. The company's revenue, which now tops US$40 billion a year, has increased more than 30 per cent every quarter since it went public in 2012.

Creating a space

The tech giant has acknowledged that growth will slow over the next few years. So siphoning some of the more than US$60 billion in advertising money that's now directed toward TV and bringing it to Watch has become a central goal.

But creating a space that can attract that money has been a challenge for Facebook. Since beginning Watch in August 2017, the company had limited the number of pages that could run video ads to a tightly curated set of entities, including well-known publishers, TV networks and celebrities like Jada Pinkett Smith and Tom Brady.

That has changed. At the end of August, Facebook started to allow more pages to run ads on videos that were at least three minutes long. The number of Facebook pages that can run video ads has gone from about 3,700 on Aug 1 to more than 23,000 this month, according to data shared with The New York Times by OpenSlate, an analytics firm that helps advertisers assess online video content.

While Facebook has invested in plenty of original programming and established shows like Buffy the Vampire Slayer this year, it has also opened up Watch to much more do-it-yourself content from comedians, video bloggers and other digital entertainers. In other words, the YouTube crowd - though the number of videos on Watch is a small fraction of what's available on YouTube.

"They need premium, hit, intellectual-property-driven stuff to fuel the idea that this is TV-style content," said Ben Lerer, chief executive of Group Nine Media, which oversees brands with popular Watch shows like The Dodo and NowThis. "But then they need the volume that comes from News Feed content coming into Watch. That's a balance that's really delicate."

With more pages showing video ads, there are more places for advertisers to run their messages, and more opportunities for Facebook users to get access to videos on the platform.

Among the most popular of these pages are entries from mainstream companies like Disney, BuzzFeed and Vice, according to OpenSlate.

But in October and December, the most popular pages included a provocative group of bare-chested performers known as Magic Men Live, and others with names like "Insane Stunts," "Jesus Today" and "Nurse Blake". There was little in the way of news and politics.

Facebook said Thursday that more than 75 million people around the world spent at least one minute on Watch every day, and that those users then spent at least 20 minutes there on average. Pinkett Smith's Red Table Talk is its most-followed show and has the most active Facebook group, according to the company.

Social engagement

Fidji Simo, who leads Facebook's video efforts, said most users were getting access to Watch by clicking into it from the platform's main site rather than through videos on their News Feed.

"Seeing how many people are coming in and watching for an average of more than 20 minutes has definitely been encouraging," Ms Simo said. "We're really seeing this content create communities and social engagement on the platform."

Dein, a 24-year-old magician from London who posts videos of street performances around the world, was able to start running video ads on his page in July. He said Facebook's rules affected the kind of videos that performed well, noting that ads can run after a minute as long as the video is at least three minutes long.

"With me, since I'm magic, I'll make sure the ad is on an exciting moment of the video," Dein said. "If I'm about to cut my finger open for a magic trick, the ad plays just as the knife goes down."

Max, Rebeen and Arman Jalal, who live in Melbourne, Australia, have amassed millions of fans on Facebook and YouTube through their unique and sometimes shocking brand of prank videos. (The brothers were once arrested after faking a series of terror attacks.)

The Jalals, who are in their late teens and early 20s, have been able to run ads on some of their videos since August, they said in a Skype interview.

One Watch video they posted in September, featuring a nun frightening people in places like a parking garage, attracted more than 130 million views and earned the brothers US$140,000, they said.

While the data from OpenSlate data shows little news content among the most popular Watch videos, Ms Simo said that was not a "deliberate strategy."

"News content tends to be on the shorter side, so we've seen a lot of news partners have a lot of one-minute videos," she added.

Advertisers are also able to opt out of categories that tend to be closely related to news and politics, like "debated social issues" and "tragedy and conflict", she pointed out.

Still, Facebook has sought to learn from the mistakes of YouTube, which saw advertisers flee last year when their messages were found on videos promoting racism and terrorism.

Facebook has sought to vet the pages that can introduce video ad breaks - the art of "brand safety", as the industry calls it. OpenSlate, which helps brands with their YouTube ads, also recently introduced a product for Facebook that gives advertisers more control over which videos feature their ads.

"There's a role for the highly produced content, but it's more of the sizzle, not the steak," said Mike Henry, chief executive of OpenSlate. "Success for these guys will come from scale and diversity of content."

"If Facebook gets this right and can generate scale of inventory and scale of audience, they have the opportunity to combine sight, sound and motion with incredible user targeting," he added. "And that's the holy grail." NYTIMES