Facebook Charges into TV Arena

Facebook is courting the TV business on multiple fronts, according to several TV industry insiders. The company is said to be talking to most of the major broadcast and cable networks about distributing their shows on its platform as part of its “Read, Watch, Listen” initiative. And in the case of cable, Facebook wants networks and cable companies like Comcast to use Facebook IDs to facilitate user-authentication — both on Facebook and TV network websites, per sources.

If these moves come to fruition, they would amount to a major coup for Facebook in its efforts to become the social operating system for a raft of media businesses. Its executives have urged media businesses to look at what it’s done for the gaming world, where Zynga sprang from nowhere to be valued at $5.5 billion, thanks to Facebook’s social graph. While still early, Facebook’s link-up with Spotify appears to show the role the ubiquitous social platform can play in reshaping how media is consumed. TV, however, is a different proposition altogether. The industry is enormous — $70 billion in the U.S. alone — and not filled with startups ready to hitch their wagons to Facebook.

There are also complications. It’s unclear whether Facebook would need a technology partner from the digital-rights management world, or whether it could ensure user-authentication on its own. But if Facebook were to become the default login for TV on the Web, it could accelerate both consumption and distribution for the entire TV industry. Users would be able to get past the hurdle of constantly having to recall their cable company-provided user ID and password — significantly lessening the hassle and intimidation factor with TV Everywhere.

And, in turn, networks would theoretically be inclined to put a lot more programming online, feeling comfortable serving millions of paying customers with full libraries (much like HBO has with its iPad app). Yet one broadcast network executive said that some MSOs are wary of letting Facebook have so much influence. According to this executive, CEO Mark Zuckerberg and COO Sheryl Sandberg were pitching this idea to cable operators at an Allen & Company conference over a year ago — and didn’t get many takers back then. After all, the TV business is doing just fine, thank you, without Facebook’s help. TV execs have taken a dim view tech giants like Google that try to push their own, often self-serving vision of how the industry should work.

Facebook is also talking to multiple networks about delivering their content on its platform, and making some real progress, say insiders. The benefit for an MTV or a Fox is that Facebook could deliver the “Spotify Effect” — instantly and continuously alerting millions of Facebook users what shows they are watching on the site. Cable networks would appear to benefit from this social amplification, but Facebook would still protect their content by insuring that it’s only available to authenticated customers.

A Facebook spokesperson declined to discuss any current negotiations. “We have long worked with entertainment companies to make their online experiences more social across multiple platforms including mobile, consoles and Web,” said the spokesperson. “We’re constantly speaking with partners about ways to improve these integrations.”

“As a promotional engine it makes a ton of sense,” said one executive privy to the cable world’s digital strategies. “It would be perfect for search and discovery.”

But for all that promise, Facebook has bumped into resistance from some broadcast and cable networks. For example, it’s worth noting that even though Hulu launched a new app on Facebook as part of the company’s F8 announcement, ABC’s content wasn’t part of the deal. That’s because Facebook never secured the rights to ABC’s series — and Hulu needs ABC’s permission to distribute its shows on other platforms. Thus, when users elect to stream NBC’s “The Office” on Facebook via the Hulu app, they can watch the show without leaving Facebook. But if they want to watch ABC’s “Modern Family,” they are sent straight to Hulu.com.

The arrangement is a good example of why tech companies have struggled to gain a foothold in the TV business, where disruptive technology takes a backseat to deal-making around thorny issues of rights. The Internet ethos of “build it, then figure it out later” doesn’t fly in the hidebound TV world, where armies of lawyers are at the ready.

It’s also noteworthy that very few cable networks were part of the F8 announcements. Several executives, who spoke on the condition of anonymity, said that they’ve been approached by Facebook about distributing and socially infusing their shows, but the networks are saying no for now.

“Why should we give them our programming to boost their platform?” asked one executive. “Our shows are already well tapped into social media. We’re not really excited about putting our shows on Facebook.”