Facebook Looks to Dominate All Forms of Media, Including Live TV
Facebook (FB) - Get Facebook, Inc. Class A Report may soon roll out an app for set-top boxes, which could help the social media giant gain more eyes and more ad dollars for the site, The Wall Street Journal reported Tuesday, citing sources.
The app also would be available on Apple's (AAPL) - Get Apple Inc. (AAPL) Report Apple TV platform, according to the report.
The Menlo Park, Calif., company, which is set to report earnings after the bell Wednesday, recently has ramped up its video efforts by launching live video, autoplay video and Instagram Stories, among other things. Facebook also rolled out a dedicated video section on its app last December that allows users to browse videos in a format similar to Alphabet's (GOOGL) - Get Alphabet Inc. Class A Report YouTube. Facebook Stories, similar to Snapchat Stories, also are being tested on the social media site.
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Facebook, though, is said to be building on that even further, holding talks with media companies to license TV-quality programming such as sports and scripted shows, sources told the Journal. That content then could be distributed on the set-top boxes, for example. Twitter (TWTR) - Get Twitter, Inc. Report has experimented, with some success, airing games for the National Football League as well as other live events.
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In recent months, analysts have begun to question whether Facebook has emerged as a pseudo media company. The social media site has become a major hub for news consumption, with about 45% of Americans saying they get at least some of their news from Facebook, according to the Pew Research Center.
Facebook could give investors a peak into what its plans are for video in 2017 when it reports earnings for the fourth quarter of 2016. Wall Street is looking for adjusted earnings of $1.31 a share and $8.52 billion in revenue, according to FactSet. Advertising revenue is expected to increase year-over-year to $8.32 billion.
If Facebook's set-top box app materialized, it also would be another way for the company to generate advertising revenue. Facebook warned investors in its latest earnings report that they should expect ad revenue to "come down meaningfully" by the middle of this year as a result of ad load reaching capacity. (Facebook is set to reveal a new earnings report Wednesday.)
The deceleration is due, in part, to Facebook running out of ways to incorporate ads in users' news feeds. Facebook has been testing midroll advertisements, which place advertisements in the middle of videos, as a means of combating sluggish ad revenue.
Facebook still remains one of the largest digital advertisers, however. Google ranks No. 1 among the top digital advertisers, accounting for 60% of the ad market's year-over-year growth in first-half 2016, while Facebook ranked No. 2 with 43% of the ad market's growth year-over-year, according to data from market research firm Digital Content Next and the Interactive Advertising Bureau. Everyone else lost 3%.
Here's what to expect from Facebook's quarterly report:
