Facebook wants to pay publishers to create more produced video as part of a plan to push the company’s new ad products, according to multiple sources.
The new deals are intended to replace the agreements Facebook currently has with publishers to produce live video, which were signed a year ago. The new accords are designed to encourage publishers to create produced video, or VOD, but it also maintains provisions to still pay for live video, the sources say.
Facebook is offering publishers a monthly sum in exchange for a minimum amount of produced video every month. The videos can be a combination of VOD and live, but live content can’t account for more than half of the monthly tally.
The videos also have to be long enough so Facebook can drop at least one ad in the middle of play. That means a produced video has to be least 90 seconds long, with live videos at least 6 minutes in length to count towards the deal, according to multiple sources.
Facebook will recoup the cost of payments to publishers by taking the revenue from these mid-roll ads. After Facebook makes its money back, the two sides will split the rest of the ad dollars, with 55 percent going to the publisher and 45 percent going to Facebook.
Facebook started testing mid-roll video ads in live videos last fall, and started doing the same with produced videos earlier this year. Paying publishers for video content gives Facebook more inventory to go out and sell those ads. At least that’s the hope.
Most of these new deals are set to expire at the end of 2017.
A Facebook spokesperson sent Recode the following statement when asked about the deals:
“As we shared last year, we are funding some seed video content from our partners, and are evolving the initial Live deals to include other types of video content we’d like to experiment with. We want to show people what is possible on the platform and we learn best from our partners. With this program, we hope to enable creativity and experimentation with video that is community-driven and takes advantage of the social interaction unique to Facebook. In the long-term, we expect to support partners through a rev share model, like Ad Break.”
Many major publishers, including The New York Times, Buzzfeed, The Washington Post and Vox Media (which owns this website) have been making money from Facebook in exchange for live video content for the past year.
Most of those deals recently expired, or are expiring soon, and Facebook is looking to keep its site flush with video content.
Publishers have been waiting anxiously for Facebook to roll out a video ad product, a way to finally make money from the billions of daily video views Facebook users generate each day.
Facebook has been staunchly against pre-roll ads, an industry norm. Mid-roll ads, akin to a short TV commercial, are Facebook’s alternative.
A number of publishers in talks with Facebook are hesitant to sign the new offerings, though some have already agreed. Publishers are worried about putting those mid-roll ads into their produced videos. Because they’re new, and unproven, publishers we spoke with are concerned it will kill video completion rates, and ultimately hurt their overall audience.
A few publishers are also surprised that live video was offered as part of the new deal. As Recode reported in January, publishers were not expecting Facebook to renew those live video contracts; many believed the amount they made from those live videos didn’t merit the time and resources it took to produce them.
Some publishers we spoke to believe that live video is part of the new proposals to help take the pressure off of a deal that would otherwise be 100 percent dependent on VOD mid-roll ads.