Facebook pays companies up to $3 million to stream live video
Facebook has signed contracts with 140 media companies and celebrities. The social network pays them for using the video streaming service Live. BuzzFeed and The New York Times will receive $3 million to broadcast live on Facebook for a year.
The contracts between Facebook, the companies and celebrities have been seen by The Wall Street Journal. The fact that Facebook pays parties to use video streaming service Live was previously disclosed by the social network, but details about the agreements have not been officially released. In total, the 140 contracts would be worth $50 million, 17 of which are worth more than $1 million.
After BuzzFeed and NYT, CNN is the largest earner, with a $2.5 million contract. In all cases, these are annual contracts. Publishers Vox Media, Mashable and The Huffington Post also have a contract with Facebook. In addition to deals with companies, the social network has made deals with well-known individuals, including Gordon Ramsay and Deepak Chopra. It is not known how much they earn from live streaming video.
According to insiders, the contracts are based on the popularity of the companies and individuals on Facebook, the number of broadcasts they want to do and possibly the length of individual live broadcasts. Some publishers can get more money if they livestream more videos than agreed in the contract.
By concluding contracts and allowing publishers and celebrities to broadcast live video on the social network, Facebook probably wants to bind its users more closely. As soon as someone starts a live stream, followers of the person or page will receive a notification in the app or on the website.
According to Mark Zuckerberg, video streaming service Live can lead to Facebook users staying on the social network more often and for longer. According to the company’s “early testing,” users spend an average of three times longer watching a live stream than watching a regular video on Facebook. The live streams on Facebook can only be viewed via the social network. Media companies claim that they get paid for live streaming because they can’t place ads on live videos themselves.
Currently, Facebook does not yet have a revenue model for its live streaming service. Although Facebook is one of the largest players in the Internet advertising market, video is not yet a major factor. The video advertising market is said to be worth $9.8 billion a year in the US alone, according to WSJ.
Last month, Facebook announced that it was partnering with Microsoft to build a 160Tbit/s submarine cable between the US and Europe. The cable is intended to handle the ‘ever-increasing data flow’ between data centers in the two continents. The focus on live video may play a role here.