Over the past few years there’s been a content war both in Canada and the United States. The main players in this battle for premium content- big telecommunications companies. In Canada, Bell recently bought the Toronto Argonauts and Rogers has owned the Blue Jays for years to get a hold on sports content. The two came together to purchase Canada’s most important sports organization, Maple Leaf Sports and Entertainment. In the United States, AT&T purchased DirectTV and Sprint recently bought a majority stake in music streaming service Tidal.
The latest content war isn’t between big telcos, but their younger counterparts- social media services like Facebook, Snapchat, Twitter and Google. Social networking platforms are to this generation what telcos were to the previous generation. In fact, these social media platforms are increasingly behaving like telcos. They’re the main medium through which we consume news and content, and they provide telephone services over wi-fi. They go a step further by allowing us to both consume and create on their platforms, something Bell, Rogers, AT&T and Sprint never allowed us to do.
Over the next 10 years social media platforms could rival cable service companies as audiences continue to migrate from cable to online streaming. Snapchat has inked content deals with A&E as well as NBC Universal for their SNL and The Voice properties. Twitter has streaming deals with the NFL, NHL and MLB. And of course YouTube has been dominating the online content game for years.
The latest fight is for music content. YouTube has owned this space for a long time, but Facebook is looking to cut into their lead. The internet is buzzing with news of Facebook looking to ink deals with record labels to bring video content to their platform.
The world’s largest social network has redoubled its efforts to reach a broad accord with the industry, according to interviews with negotiators at labels, music publishers and trade associations. A deal would govern user-generated videos that include songs and potentially pave the way for Facebook to obtain more professional videos from the labels themselves. “We’re hopeful that they are moving toward licensing music for the entire site,” said David Israelite, president of the National Music Publishers Association, an industry trade group…While Facebook faces competition from Twitter Inc. and Snapchat Inc., its main rival is Google, and music is one of the most popular types of videos on Google’s YouTube service. Facebook declined to make an executive available for an interview.
Now, I’m mixed on this whole thing. On one side, I never liked the idea of big telecommunications companies consolidating cable services and content under one umbrella. They’re too powerful. These social media companies are becoming the new telecommunications companies and they’re probably even more powerful than their predecessors because of the internet and the access they have to our personal data.
But on the other side of the coin, I’m a fan of disruption and it would be nice to see these younger companies disrupt the telecommunications industry and even put some of those companies out of business.
When it comes to Facebook’s pursuit of music video dominance, they have a few things going for them. According to Facebook, they average eight billion video views per day while YouTube averages about five billion. Also, as the Toronto Star noted, Facebook may give record labels leverage in negotiating a better deal with YouTube. But the secret will be in usability. For YouTube, video isn’t just a key part of their business; it’s their whole business. Having a platform based on channels makes it easy to find exactly what you want and by subscribing to those channels you don’t have to spend a lot of time searching for new videos. For Facebook, video is an important part of their business but the platform is crowded with other features, including updates from friends, that you need to sift through to get what you want.
Facebook is rich with features and they wouldn’t have it any other way. They want to keep you on their platform for as long as possible, but the size of their platform and the amount of features could also be a weakness. Over the past five years we’ve seen Facebook compete with Twitter, Google+, and more recently Snapchat and YouTube by copying features or launching similar products. I’ve rarely seen a company succeed by “being all things to everyone” which seems to be Facebook’s strategy. YouTube works because it specializes in one thing and is easy to use.
Unless Facebook integrates channels into their platform and makes it easier to find what you want, YouTube will continue to rule music video content.
“I think Facebook is ridiculous and is trying to do too much. They’re ripping off everyone and I don’t like that.” -Badhaso Roubbo, President of EMV Agency
“In this medium, YouTube has established itself as a leader. It provides resources for creative forces and dedicates itself to making video production more appealing for the creators and the audience. FB would have to innovate in a way similar to what Netflix did in order to pose a threat to YouTube. Last but not least, YouTube doesn’t require any accounts to be used to access content and it’s easy and reliable for all ages. -Vladimir Jean-Gilles, Creative Director of SHIFTER On Films