Facebook correctly predicted the next big area of ad growth was mobile. Now, it's setting its sights to the next frontier: video — which means YouTube may have to make space.
"I see video as a mega trend, same order as mobile," said Facebook CEO Mark Zuckerberg on an earnings call on Wednesday.
Facebook is investing in more original video content in 2017, with a focus on shorter form content, Zuckerberg said. Short-form includes social content posted for friends, promotional content for brands and celebrities and premium content posted by creators, he said. Zuckerberg said he understands premium content needs to be supported by ads — and they are coming.
"Consumer video is exploding on our platform as Mark was talking about, and that really creates ad opportunities," said Sheryl Sandberg, Facebook chief operating officer.
No company has come close to dethroning YouTube ad-supported video platform. Recently, some of its top creators have complained about YouTube because of unannounced platform changes including algorithm tweaks and moves to push viewers towards more "advertiser-friendly" content. However, without a viable alternative for people to independently upload content and get paid for it, most people were stuck on YouTube.
If Facebook does unveil an ad model for short-form video, it could create competition in the marketplace. Facebook has been expanding its video functions, including adding a video tab, letting people post live video and experimenting with live 360-degree video. Zuckerberg had previously told BuzzFeed he expected Facebook to be mostly video within the next five years.
The company reported quarterly earnings on Wednesday of $1.41 per share versus the Thompson Reuters consensus estimate of $1.31 per share. It posted revenue of $8.81 billion, compared to the estimate of $8.51 billion.
