Facebook is signaling that's ready to spend a bundle on original TV-style content -- upwards of a billion bucks in the next year, according to an anonymously sourced report in the Wall Street Journal.
Earlier this month, the Wall Street Journal also reported that Apple has earmarked $1 billion in spending on original entertainment over the next year. So perhaps the main takeaway here is that Facebook chief Mark Zuckerberg simply wants the market knows he's willing to play in the same league as Apple, the world's biggest tech company.
Whether Facebook will actually shell out hundreds of millions for shows it pushes into Watch, its new video-aggregation guide, is another question. The fat billion-dollar number, supposedly through the end of 2018, "could fluctuate based on the success of Facebook's programming," according to the Journal report.
There's reason to be skeptical about how big Facebook's appetite will be for funding original shows. The strategy, company execs have consistently said, is that it's investing in the initial batch of Watch shows to jump-start the video-creator ecosystem on the platform. Its stated long-term ambition is to operate like YouTube, open to anyone, and to share advertising revenue with content creators and publishers in a 55%-45% split (where the content owner receives the larger portion).
In addition, it's unclear from the Journal report whether that $1 billion figure includes sports programming deals. The biggest spending by Facebook on video content would likely be around streaming sports rights: Facebook entered a losing bid of $600 million for a five-year deal Indian Premier League cricket matches, which was won by 21st Century Fox Inc.'s Star India for $2.55 billion.
Currently, Facebook is running a weekly live-streaming Major League Baseball game, and also has cut pacts for Major League Soccer and other sports leagues. It bid for the NFL's "Thursday Night Football" 10-game package for the last two years, but lost out to Twitter in 2016 and to Amazon for the current NFL season.
In addition, while the WSJ piece suggests Facebook's original content push puts it into competition with the likes of Netflix, Amazon and HBO, that's not really true. Netflix and Amazon currently spend far more on content -- in the neighborhood of $6 billion and $4.5 billion, respectively -- as does HBO (at around $2 billion annually).
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