A document reviewed by the Wall Street Journal revealed that Facebook is going to pay $50 million to 140 publishers and celebrities that agreed to post Facebook Live videos. The publishers and celebrities will also be promoting their videos on their sites, Facebook and other social media channels.
This is a marketing strategy to launch Facebook Live as the place to post live videos thus changing the dynamic of the news feed from your friends text posts and pictures to television like entertainment and information. Facebook sees video as its future, both in terms of the type of content that users post and consume and as where they see the bulk of their future revenue coming. Just last week a Facebook VP stated in an interview that she predicts that within five years Facebook will be "all video."
Facebook has long predicted that video advertising will eventually be their main source of revenue with Mark Zuckerberg once saying that if they sold a video ad at the top of the Facebook news feed for $1 million it would be equivalent to three Super Bowls every day.
Early this year, Zuckerberg talked about how Facebook will evolve to be a video platform commenting, "Most of the content 10 years ago was text, and then photos, and now it’s quickly becoming videos," Zuckerberg said. "I just think that we’re going to be in a world a few years from now where the vast majority of the content that people consume online will be video."
Just last week Zuckerberg hosted its first Facebook Live Q&A to all Facebook users, at one point reaching 6 million concurrent viewers.
The contracts to pay popular sites and celebrities is a way to launch Facebook Live while it works out a share of revenue concept. YouTube typically pays out 70% of revenue but pays even more for certain premium content. Its Facebook Live partners include a wide variety of publishers, celebrities and sports starts such as NFL quarterback Russell Wilson, CNN, Kevin Hart, Vox, Mashable, Tastemade, New York Times, Gordon Ramsay, Deepak Chopra and the Huffington Post.
“We wanted to invite a broad set of partners so we could get feedback from a variety of different organizations about what works and what doesn’t,” Justin Osofsky, Facebook’s vice president of global operations and media partnerships, said in a statement.
The value of individual contracts varies widely, with 17 worth more than $1 million, according to the document. The highest-paid publisher is BuzzFeed, slated to receive $3.05 million for broadcasting live between March 2016 and March 2017. Just behind BuzzFeed is the New York Times, which is to receive $3.03 million for a 12-month deal. CNN is third, with a $2.5 million contract.