Facebook is Failing to Lure TV Companies Into Deals Because It Wants Too Much Control

Image of a TV set with static on the screenA major disconnect is forming between Facebook Inc (NASDAQ:FB) and several major television content producers, as the social media giants continues to misunderstand its role in bringing content to the masses.

This rift has caused many big-name producers to avoid the platform, and others to drop out of previous deals.

From the Wall Street Journal:

The National Football League, Walt Disney Co. and Comcast Corp.’s NBCUniversal are among television content owners that are resisting striking deals with Facebook Inc. for its video features, concerned about ceding control to the social networking giant and undermining the value of their programming.

Facebook has been courting premium content owners for its “Suggested Videos” feature and Facebook Live, its new live-streaming product, people familiar with the matter say. Media companies want to partner with Facebook to get in front of a massive pool of viewers on their phones, but they have serious concerns about Facebook’s proposed deal terms and its recent algorithm changes for how content surfaces in users’ News Feeds.

Reportedly, Facebook wants full control of selling the ads that would run in conjunction with the videos, which the companies aren’t willing to give up. A senior VP at NBCUniversal called the situation a “fundamental disconnect” on how the ad sales would work.

Content owners also fear that Facebook doesn’t appreciate the value of premium content. FB got under many media companies’ skin recently with changes to its News Feeds algorithm, which now give precedence to posts shared by a user’s friends and family, rather than to publishers themselves.

Facebook already has a massive video presence, with more than 8 billion video views per day on its platform. But publishers remain skeptical about how much money they stand to make from a partnership:

Andrew Morse, executive vice president of editorial for Time Warner Inc.’s CNN, which signed a one-year, $2.5 million contract to produce Facebook live video, questioned whether the network will remain committed to the initiative.

“If we can’t figure out a way to monetize it, it’s hard to see the long-term viability,” he said.

Facebook shares rose $0.19 (+0.15%) to $125.07 in Thursday afternoon trading. FB has gained almost 20% year-to-date.


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