Source: Facebook
Facebook (META -2.28%) continues to reward its investors: As of this writing, the stock is up nearly 36% over the last year, with 11% of that run occurring in this month alone. The company's spike has been assisted by its performance in video as it takes on the 800-pound gorilla in social-media video viewing -- Google's (GOOG -1.80%) (GOOGL -1.82%) YouTube.
According to CNBC (h/t Business Insider) the company is partnering with Time Warner's HBO to stream two new shows on the social-media site. On Dwayne "The Rock" Johnson's Facebook page, fans can watch the season premiere of his new show Ballers, while the new comedy title The Brink is available on its dedicated page.
On first thought, this could seem a threat to subscription-based video content provider Netflix. While that is a possible risk, it's rather benign as the impetus for these premieres was advertising. Instead, this is a direct to YouTube's business model: These rollouts are exclusive to Facebook using native uploading, cutting YouTube out of the monetization process.
Native versus hosted video
You might not have noticed, but there has been a huge shift in the videos you watch on Facebook. Before 2014, the majority of videos for brand marketing were uploaded to Google's YouTube and then distributed, or hosted, on Facebook and other social-media outlets. In 2014, those numbers were reversed -- according to data firm Socialbakers, those brands have stopped posting YouTube videos on Facebook, opting instead for native publishing (read: uploaded directly to Facebook). Part of that was due to a change in Facebook's algorithms that disadvantage YouTube uploads, and functions like a native viewing counter.
In April, Facebook CEO Mark Zuckerberg bragged about total video performance, which was reported to be more than 4 billion views per day at the time. This is still smaller than YouTube's roughly 7 billion views per day, but Facebook is catching up fast -- Facebook saw a 400% year over year increase in video uploads in 2014. More and more advertisers are posting directly to Facebook and that's important because YouTube obviously gets cut out of any ad-based revenue for any natively uploaded content on Facebook.
Facebook continuing to monetizing its huge user base
For Facebook, this is a smart move. The company continues to find new ways to monetize its user base. The big difference between YouTube and Facebook is the former exists mostly to upload content while the latter has the benefit of a communication and distribution tool. While YouTube has channels to improve user distribution, they are nowhere near as effective as Facebook. Simply put, it is much harder to create a site with nearly 1.5 billion dedicated users than it is to create a site to upload and view videos.
As far as HBO is concerned, this appears to be a way to promote its streaming-based HBO Go service -- the introduction to both shows discuss HBO's stand-alone product. For advertisers, it is starting to look like Facebook is the first place to share advertisements, and that could be a big problem for YouTube over the long term.
