Facebook reportedly readying an app for TV boxes

PanARMENIAN.Net - Facebook Inc. might be coming to a bigger small screen. The social network is developing a video-centric app for television set-top boxes, including Apple Inc.’s Apple TV, people familiar with the matter said, giving it a home for video content—as well as a new vehicle for video advertising, The Wall Street Journal reports.

The app is one of several Facebook projects aimed at making it a “video-first” company that can compete for television ad dollars. The social giant has been marketing its live-streaming capabilities, testing a new video ad product and integrating more videos into Instagram, its photo-sharing app.

Facebook is also in discussions with media companies to license long-form, TV-quality programming, people familiar with the situation said. A set-top box app would be a natural way to distribute that “premium” content and make it accessible on TV sets.

Facebook is already the second-biggest player in digital advertising, after Alphabet Inc.’s Google. But the social-media giant said last November that its main source of revenue, the news feed, was running out of room for more ads.

As a result, executives warned that revenue growth would “come down meaningfully” starting in the middle of this year. Facebook is due to report its fourth-quarter earnings on Wednesday, and analysts expect revenue to have increased 46%—the slowest rate of growth in five quarters—to $8.5 billion, according to Thomson Reuters.

Tapping more of the $70 billion U.S. TV advertising market could help offset its growth plateau. Video ads command a premium over text- and image-based ads within the news feed. Though video ads already contribute to Facebook’s growth, deep-pocketed advertisers still spend the bulk of their marketing budgets on television ads.

Last week, Facebook tweaked its news feed to boost the visibility of videos over 90-seconds long. The move could result in more advertising space for Facebook to sell, publishers briefed on the project said. Facebook has told publishers that it plans to share revenue from mid-roll ads with them.

The set-top box app under development would offer another, potentially more promising route for Facebook to seize a larger portion of TV budgets, the people familiar with its app development said. Facebook has been contemplating some version of a video-focused set-top box app for years, but the effort was revived last summer when Facebook executives decided to double-down on video for the second half of 2016. In October, Facebook introduced a feature allowing users to stream videos from the Facebook app to their TVs through devices like Apple TV or Google Chromecast.

The new app would go further than other set-top box apps that Facebook has developed with companies like Roku, Inc., because one design Facebook was mulling wouldn’t contain any “non-video content,” said one person briefed on the app. The existing Roku app allows users to view photos and videos.

The app would be a home for video content, including the original, premium content that Facebook currently is trying to attract from major studios, the people said. Facebook eventually would sell ads against that content, giving it another way to generate growth to offset the expected decline in ad growth in its core news feed.

“If there’s good video content, you’ll actually watch a couple thirty-second video ads,” one person familiar with the efforts said.