Facebook The Media Company: If It Looks Like A Duck
Yesterday Facebook's CEO Mark Zuckerberg finally confirmed that Facebook is a media company, not a traditional one, but a media company nonetheless. This is something we've been thinking about a lot at MIDiA, so much so in fact that we have just published an entire report on the subject: "Facebook The Media Company: If It Looks Like A Duck"
The report forms part of MIDiA's new Paid Content service, which we will be telling you more about early in the new year.
If you are a MIDiA client and would like access to the report email firstname.lastname@example.org
Here is an overview of the report:
The 20,000 Foot View: Facebook beat financial analyst estimates with its Q3 2016 earnings but announced that ad revenues would likely slow in 2017, due to the digital ad market feeling the pinch of advertiser budgets, which are lagging behind the shift in user behaviour. Facebook’s stock fell by 7% but Plan B is already in motion: to become a media company. Facebook delayed this move as long as it possibly could, showing little enthusiasm for getting bogged down with content licences while it was able to drive audience growth and engagement by piggybacking on other people’s content. That strategy has run its course. In December 2016 CEO Mark Zuckerberg announced that 'Facebook is a new kind of platform', code for 'media company'. Facebook is now about to start looking and behaving much more like a media company, but in doing so it will rewrite the rulebook on what a media company is.
Key Findings (data points removed from this report preview)
- Facebook’s combined portfolio of Messenger, WhatsApp and Instagram give it a TK% share of the global messaging app marketplace
- Facebook’s messaging app strategy is shifting audience time to platforms that Facebook is currently less able to monetize
- At the end of Q3 2014, Facebook Messenger MAUs were just TK% of all Facebook users, but by the end of Q3 2016 the share had risen to TK% – virtual saturation
- Facebook has two strategic imperatives: 1) get users more engaged on its core platform, and 2) build new revenue streams for them there
- TK% of consumers watch videos on Facebook, representing TK% of Facebook’s weekly active users
- Facebook has become a one trick pony – TK% of Facebook’s 2015 revenues were from advertising
- To offset slowing ad revenue, Facebook needs to create a suite of new revenue streams, the sum of which will be transforming itself into a media company
- The $TK billion mobile and PC gaming industries are the standout addressable segments for Facebook
- Filters, live streaming, TV, video and music are all other areas in which Facebook could explore monetization
- Convincing Wall Street that its long-term strategy justifies a near-term struggle is almost as important for Facebook as executing the strategy itself
Companies and services mentioned in this report: Alphabet, Amazon, Apple, Facebook, Instagram, Messenger, Musical.ly, Pandora, Spotify, WhatsApp, YouTube