This is an excerpt from a story delivered exclusively to Business Insider Intelligence Digital Media Briefing subscribers. To receive the full story plus other insights each morning, click here.
Facebook Watch is reportedly canceling two-thirds of existing Facebook Watch news shows that the company says aren’t performing, per Digiday.
Last June, Facebook rolled out a slate of 21 daily and weekly news shows from publishers like ABC News, CNN, and Business Insider. It’s unclear which specific shows won’t be renewed, but the company has previously said that renewal decisions are based on shows’ ability to drive audience, loyalty, and community engagement among users, per Ricky Van Veen, Facebook head of global creative strategy.
The belt-tightening comes as Facebook Watch aims to define and clarify its formula for what content will perform best on the video hub, which has yet to scale viewership. Facebook Watch has had a tough time growing viewership so far, as less than 5% of Facebook’s 1.52 billion users spend time with the platform.
As it attempts to figure out what works, Watch remains in a state of flux, in which it continues to test and dynamically iterate on programming decisions. Where the initial goal may have been to flood Watch with content, Facebook is now operating more like a TV network: seeing what content draws an audience — like Jada Pinkett Smith’s “Red Table Talk,” which has garnered a platform-leading 4.6 million followers, for example — and then making investments or cuts accordingly.
Facebook likely wants to build more symbiotic relationships with publishers, wherein partners can build sustainable businesses with shows. Facebook will still fund news shows, but it’s reportedly looking to spend less per show in order to stretch its $90 million news budget across more programs, including international news shows, per Digiday. To compensate for budget cuts, Facebook is likely to increasingly offer publishers an ad revenue share wherein publishers would retain 55% on sales from mid-roll ads.
Offering an ad revenue share diverges from Facebook’s previous arrangement, in which Facebook fully funded production but kept all ad revenue to recoup costs. That shift could signal a growing willingness on Facebook’s part to help partners generate revenue over a longer term from distributing on the platform, particularly as it looks to make Watch a greater destination for high-quality video content. For publishers to continue supplying such content — in the same way that studios do to networks — Facebook will need to ensure mutually beneficial exchanges.
Interested in getting the full story? Here are two ways to get access:
1. Sign up for the Digital Media Briefing to get it delivered to your inbox 6x a week. >> Get Started
2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Digital Media Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now