Facebook will not be side-stepping into the pay-TV world as it represents too much of a change from the direction the company is already heading in. This is based on a new report out of Variety that draws on “multiple sources” for the information. The report looks to reconfirm the fact that Facebook has had talks with various pay-TV options, including HBO, although unlike previous reports, disagrees with the importance of those talks by suggesting they were more of an inquiry into whether it would be worth considering such a move, instead of the first steps of one the company plans to act upon.
Previously, a report came first alluding to the talks Facebook had with not a number of pay-TV channels, including HBO, Showtime and Starz. In fact, the report went beyond just saying talks had taken place but pointed to how those talks had been ongoing “for months” and even suggested the possibility the service could launch in a matter of months - within the first half of 2019. A suggestion which further implied the development of the service was much further along than what is now being suggested in this latest report. Although such a contradiction in reports is not uncommon, the fact that these reports have come through in quick succession and both based on sources familiar with the matter makes anticipating the chances of Facebook moving in this direction more difficult. For example, those providing the information in this latest report are on the fence a little as they suggest the move is unlikely - not impossible.
TV matters to Facebook, so the move makes some sense
Facebook has not hidden the fact that it’s interested in TV and so making a move to provide its users with more of streamlined way to engage with pay-TV services makes sense. Even more so when considering the ad-based nature of Facebook and how the company could easily generate additional revenue from ads that are shown which when clicked through result in an additional affiliate bonus. In addition, the idea the channels could be somewhat tied into the company’s “Watch” service - a la Amazon Channels -- would appeal to Facebook as it would act as way for the company to further keep users within its ecosystem for even longer. Something Watch is in need of as it looks to expand its user numbers which although have been cited as good enough by the company in the past, are unlikely to be less than Facebook wants, and might have been predicted by the company's substantial user base.
One of the points made by the information in the new report is in spite of this being designed as a means to bolster Watch numbers, the use of traditional TV channels such as HBO are not entirely in sync with what Watch is designed to do with the suggestion the inclusion of HBO, Showtime or Starz may confuse the message Watch wants to project and while this could possible attract new users to the service, it could equally put off existing users who prefer the current Watch message and style. Building on this point, there’s the issue of the format itself which typically goes against the grain of the entire business model used by Facebook. As this would mark quite the departure from Facebook’s typical stance of banking on revenue generating from ads instead of asking users to pay for something. Whether this means Facebook never moves towards offering more traditional TV options or not is unclear. At the moment, it may simply be a case of the wrong time for a pay-TV solution
Facebook has bigger things to worry about
With 2018 now about to come to a close, Facebook is likely to be glad to see the end of the year and the arrival of the next as this year has seen the company plagued with criticisms on how it handles user data and just privacy in general. Therefore, it is arguable Facebook has bigger issues to deal with in 2019 then focusing on a new pay-TV delivery system. The company will no doubt want to be on the front foot next year in trying to rebuild consumer trust in the brand and the launch of a new service which could in theory be seen as another data collection and selling tool might not help in this regard.
The company is already well-versed in this as reports this year have routinely argued Facebook wanted to launch its Portal line of smart displays earlier than it did but held back due to the ongoing privacy concerns. While the company did eventually launch the smart displays, even after a delay it still faced criticism on the data they are, or are not collecting. Likewise, the company is also rumored to be preparing a camera-focused TV device that it hopes to launch in 2019 and this is also likely to face similarly criticism on arrival.