Facebook has decided to take on YouTube this time with the new video revenue sharing feature it has announced. According to a report published in Re/Code the social media giant has decided to share revenue with the video creators themselves.
The share earned by YouTube videos is clearly going to decrease if companies start providing more polished video content on Facebook. The move by Facebook is done to attract mobile users who contribute views each day. According to RBC Capital Markets analyst Mark Mahaney, for YouTube, the mobile contribution is 50%.
Facebook has already slotted video ads in the News Feed of users. The new feature will be called Suggested Videos, and will include ads in it.
If users want to watch a video about a certain topic, he will be taken to a page where suggested videos are. You can see videos of your chosen topic and then you can move to other videos Facebook has suggested. If you click on a friend’s video, you will see more videos from the same person, and if you click video from a brand, then videos from big brands will be shown.
Facebook will retain 45% of revenue received. The video producers will have to split their shares in many ways and they will be left with a small amount. For example, if a user checks out three videos but views only one ad and skips the rest, the remaining amount will be shared between among video creators.
YouTube is going to face a major threat. When asked by Re/Code, Dan Rose, VP of partnership of Facebook, said, “A lot of [our partners] have said this will be a big motivation to start publishing a lot more video content to Facebook.” He added, “That’s exactly what we’re hoping for.”