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One of the reasons for why YouTube has exploded the way it did in recent years is because of the extra incentive that its content creators have to produce the most entertaining and viral videos possible; ad revenue. Now, Facebook is also going to be introducing this system to content creators for its Video service. This is a huge change for the social media site, which currently keeps all ad revenue to itself.
The format that Facebook is proposing involves “mid-roll” advertising, where the ad will show up some time after the footage starts rolling, Recode reports. In all likelihood, the ads will kick in at about the 20-second mark, though not necessarily with regards to the length of the video.
Most surprising about the development, however, is the fact that publishers will get to keep 55 percent of the revenue earned from the ad. This is reminiscent of the same system that YouTube has in place, but it’s quite jarring when done by a company like Facebook.
Should the offer prove popular, it will provide publishers the chance to earn ad money via the videos that they have been posting on the social media site. This presents them with a huge opportunity as well since over 100 million hours of Facebook videos are watched every single day.
On that note, not everyone thinks that this development is a good move by Facebook. Bloomberg published a piece that brings up the possibility of damages done to its bottom line
“Sharing money is more equitable but could damage Facebook's finances,” the piece partially reads.
The publication attributes this possibility to the difference in profit generation between YouTube and Facebook, where the latter makes more ad money than the former because it gets to keep all of the profit made. In contrast, YouTube has to share all ad revenue with content creators. This isn’t to say that the Facebook will destroy itself if it proceeds with the “mid-roll” format, but it might stand to make less money by doing so.
