Video Briefing: Facebook Watch budgets have shifted as priorities change

The key hits:

• A few months ago, Facebook decreased the budget for entertainment programming, which is overseen by Ricky Van Veen’s team.
• Facebook is not walking away from entertainment programming but is seeking fewer, bigger Watch shows that are unique to its platform.
• This leaves out early, unscripted short-form formats that Facebook bought in droves for Watch.
• All of this has led to some U.S. publishers to move away from actively pitching Facebook on new funded shows.
• Meanwhile, after initially staying away from news publishers, Facebook continues to prioritize daily and weekly news shows on Watch.
• The news programming budget is overseen by Campbell Brown’s team.

A few months ago, Facebook decreased the budget for entertainment shows, which are overseen by Facebook’s head of global creative strategy Ricky Van Veen’s team, sources say. Facebook says it doesn’t comment on questions relating to budgets.

This doesn’t mean Facebook is walking away from entertainment programming. The company continues to commission projects such as “The Real World” reboot and the Jada Pinkett Smith-hosted “Red Table Talk,” but it has sought fewer, bigger projects. As we reported last week, it is eyeing shows — often with household-name talent or built-in Facebook distribution — that makes use of Facebook’s community features.

That has left out many of the type of unscripted, short-form lifestyle formats that Facebook bought in droves during the early stages of Facebook Watch in the U.S. This has prompted some U.S.-based publishers to give up on pitching new ideas to the platform. One big publisher, which produced more than five Facebook-funded Watch shows since the video section went live last August, says it’s no longer actively pitching Facebook. A second, smaller publisher says Facebook’s decision to move away from those early short-form formats has meant turning its attention to other, long-form content buyers. “It’s more mentality now to go after YouTube, Amazon and Hulu than to go after Facebook,” the smaller publisher says.

Another reason publishers have been less inclined to sell to Facebook: the platform has sought longer licenses or outright ownership of the programming they buy, which eliminates the ability for potential production partners to earn extra money through syndication and other, later-window revenue streams.

As more publishers look to go Hollywood, the notion of developing “IP” has taken on greater importance as these companies look to create series franchises with multiple sources of revenue. That’s harder to do if Facebook owns the product.

Of course, it’s always important to note that Facebook can change its strategy on a dime. Take, for instance, news programming. After initially staying away from news publishers, Facebook rolled out daily and weekly shows from publishers including CNN, Fox News and Mic. This budget is overseen by the team reporting to Campbell Brown, who joined Facebook in January to help smooth over the platform’s relationship with news publishers.

As is usually the case, if Facebook is still willing to pony up the cash, most digital publishers — whether they do news or entertainment — would be happy to take their money. “Even if [Watch] wasn’t working, we would still sell them [stuff] if they were paying what we think we could get for them in the market,” says the first publishing source.

Confessional

“‘Give me something that can only work here.’ Yeah? Then build something that’s actually unique. Right now, all of the platforms are just like everybody else.” — Social video publishing exec

Numbers don’t lie
$100+ million: Royalty payments from Crunchyroll to anime studios and content owners back in Japan, one reason why the company says it can compete against streaming giants.

20 hours: On average, active viewers of adult animated series on Hulu — shows such as “Bob’s Burgers” and “South Park” — stream for nearly 20 hours per month, according to Hulu.

60 percent: Percentage of Netflix subscribers globally that watch kids and family programming on the service, which is moving to create more such programming internally.

Join us at the Digiday Video Marketing Summit
We’re hosting our first-ever Video Marketing Summit in Nashville, Nov. 28-30. The event will tackle a wide range of topics in video marketing and advertising. Want to speak? Want to attend as a VIP? Hit me up. (Again: This opportunity is for brand marketers and ad agencies only.)

What we’ve covered
Roku is moving from tech provider to media company:

• Roku is best-known for its hardware, but the company’s ambitions are to build a big OTT ad business.
• Advertisers expect to increase the amount of dollars they spend on Roku, especially as Roku aims to take more control of the ad supply on the platform.

Read more about Roku here.

U.K. public broadcasters face hurdles in gaining prominence connected TV:

• BBC, ITV and others get top placement on the linear TV guide, but that’s harder to secure in connected TV environments.
• There is reluctance among pay-TV companies such as Sky to giving broadcasters more prominence.

Read more about public broadcasters in the U.K. here.

What we’re reading
Nancy Dubuc’s plan to fix Vice Media: Vice Media’s first outside CEO is the “mature grown up” who has to turnaround a company that reportedly missed its revenue targets in 2017. One interesting thing to note: Dubuc is steering Vice, which is valued at $5.7 billion, to a “strategic sale” instead of going public.

HQ Trivia is struggling: Once the hottest thing to hit your smartphones on a daily basis, interactive game show “HQ Trivia” has seen daily viewership plummet. The show is still getting hundreds of thousands of players for even midweek games, but the game is not the viral sensation it used to be. Fads come and go, but HQ Trivia’s parent company — which recently got a new CEO — needs to create new hit games or see its relevance continue to fade.

If the streaming wars were “Game of Thrones”: NBC News decided to compare all of the big players in the streaming wars to “Game of Thrones” houses. You won’t be surprised to find out that Netflix and its CEO Reed Hastings are depicted as the cold, unfeeling “white walkers.” Disney is depicted as the Starks, which… doesn’t bode well for Disney’s streaming ambitions. (Don’t nitpick the selections or reasoning here, just enjoy the art.)

Disney’s push to go direct to consumer will be complicated (sub required): I’ve talked about how Disney’s decision to launch an SVOD service will mean the company will have to largely walk away from a very lucrative film and TV licensing business. But there are other complicated matters that Disney will have to figure out, including: how to structure bonuses when subscriber growth is the new key metric for success.