Facebook Inc. Is Closing In on YouTube

Facebook announced that its users watch 8 billion videos per day.

You're not alone if you've noticed an increase in the number of videos you see on Facebook(NASDAQ:FB). The social network reported that daily video views grew to 8 billion during the third quarter, double where they were six months prior. That number of video plays puts it around the same level as Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube.

YouTube started eschewing total video plays several years ago in favor of total viewer hours, which provides a better picture of how much time viewers are spending on YouTube. Viewer hours are probably lower on Facebook because of the three-second view time necessary to register a view on the platform. Nonetheless, the phenomenal growth over the past year makes Facebook a clear threat to YouTube.

A News Feed full of videos
At this time last year, Facebook had just announced that it was seeing users watch 1 billion videos per day. YouTube reached 1 billion views per day in October 2009. It took more than two years for that number to reach 4 billion views per day. So Facebook's growth is certainly fast.

Facebook says it averages around 500 million video viewers per day, which means the average video viewer on Facebook watches 16 videos per day. Facebook can do that because it controls the News Feed. The News Feed is one of the most popular products in the world, and users continue spending more of their time browsing content. Facebook can tweak how much of that content is pictures, videos, text, or links, and it's clearly favoring video for a lot of users.

A recent survey found that businesses reach 2.5 times more of their page followers by posting a video instead of a photo, and videos reach almost nine times more people than simple text updates. Facebook is certainly giving businesses incentive to post more videos to reach their audiences. As a result, the number of quality videos being posted and the number of video advertising opportunities are both increasing.

Video ads will probably be the next big growth driver for Facebook's ad revenue. The format currently provides a lower cost per conversion than any other format on Facebook, but prices will probably rise as more businesses promote their own video posts. Getting users used to seeing lots of videos in their News Feeds is paramount to increasing video ad load.

Overcoming the quality gap
Mark Zuckerberg wasn't afraid to tell investors where Facebook is lacking when it comes to video. He pointed out that the company has had trouble attracting quality content from video entertainment creators that flock to YouTube for its revenue sharing program. "There's a certain class of content which is only going to come on to Facebook if there's a good way to compensate the content owners for that," he said. "And we've recently rolled out the business model for this, which is for premium content; we'll give a revenue share on a portion of the views to the content owners."

He's referring to the suggested-videos feed the company started testing last month, offering a share of ad revenue from video ads inserted in between videos. Revenue is split based on view time for each video. Zuckerberg says the company has received good feedback so far, and it will roll out to more partners if it continues to please content creators.

Facebook has also taken the steps to curb the amount of video piracy on its platform, where some page will post content ripped from YouTube. In August, the company rolled out a new video matching tool that it's made available to select creators. The tool allows users to upload their videos, and it scans all of Facebook's 2 trillion posts for infringing videos.

Getting intellectual-property protection in place with a good revenue-sharing system will help Facebook attract more content that would otherwise end up on YouTube. While it's not likely to attract YouTube creators with established audiences, Facebook's substantial audience could attract creators new to digital video.

Still a lot more to do
Zuckerberg was clear to point out that Facebook is still in the early going with video. Based on the fact that only half of its daily users are watching videos, I'd have to agree. "There's a pretty clear roadmap of stuff that we're going to do over the next couple of years," Zuckerberg said. "But we're just so early in this right now. It's pretty amazing how quickly it's growing, but there's a lot more to do."

Investors should watch for further developments to increase the total number of people watching videos and the number of premium content owners partnering with Facebook as it expands its revenue-sharing platform. YouTube is still ahead of Facebook, but Facebook could be the premier destination for a video experience in just a few short years.

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YouTube to launch app, website dedicated to gamers

"This summer, we'll launch YouTube Gaming, a brand new app and website to keep you connected to the games, players, and culture that matter to you, with videos, live streams, and the biggest community of gamers on the web-all in one place," Alan Joyce, product manager, wrote in the company blog.

The new gaming service will be completely separate from the rest of YouTube, according to Google's announcement. YouTube Gaming will have more than 25,000 games that will each have their own page, as well as channels from a wide array of game publishers and YouTube creators.

Other features the service will have include high frame rate streaming at 60fps, DVR and automatically converting all live-streams into YouTube videos.

YouTube Gaming will roll out this summer in the U.S. and in the UK.

Google Brings Shopping Experience to YouTube

Photo by Ethan Miller/Getty Images(SAN FRANCISCO) -- YouTube wants to change the way people buy items and is harnessing the power of its videos to help connect consumers and retailers. 

Sridhar Ramaswamy, Google's senior vice president of advertisements and commerce, announced what could be a revenue-boosting plan for the video sharing website Thursday during his keynote at Ad:Tech in San Francisco. 

Google is adding products to its TrueView advertisements -- the spots that users can skip after watching for a certain amount of time. The hope here is that instead of looking away while the ad rolls, users will click on a product and be taken to the retailer's website to complete their transaction. 

"In a world where people want things right away, this is the ultimate expression of a full-purchase journey within an ad," Ramaswamy said. "For the first time, viewers will be able to not only learn about products through video -- they’ll be able to shop for them as well -- seeing product listings within the video itself." 

Ramaswamy said Wayfair, a furniture retailer, used the system for shopping advertisements. When compared to other video campaigns, he said they saw their revenue triple per view, along with a 20 percent increase in their view through rate, the number of people who stick with the ad until it ends. 

YouTube also announced Thursday an early preview of 60 frame per second live streaming video. While the new frame rate is still in early preview, it could help YouTube make a play for gamers who broadcast their adventures on Amazon-owned competitor Twitch. - See more at: http://www.610kvnu.com/business/39aa4dc7623e28aa721e0361edadf2f5#sthash.FcLSkeBC.dpuf

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YouTube turns 10: The video site that went viral

YouTube is the Web's de facto home for video. But 10 years ago, online video was anybody's game. As it celebrates a decade offering us everything from new celebrities to cat videos, YouTube has become a premier destination for content. Here's how it got there.

Ten years ago today, a startup called YouTube uploaded its first video.

Co-founder Jawed Karim, in a private test of the fledgling service's capabilities, posted a short video of himself at the San Diego Zoo. The 18-second clip shows Karim unenthusiastically noting how elephants have "really really really long, um, trunks. And that's cool. And that's pretty much all there is to say."

Actually, there's a lot to say. From that modest beginning, a mammoth has evolved.

It's difficult to overstate just how big YouTube is: By the time you finish watching Karim's "Me at the zoo," other YouTube viewers around the globe will have collectively watched more than seven years worth of video. In the time it takes to watch that test video two more times, about 12 days of footage will have been uploaded to Google's video site.

Today, YouTube attracts more than 1 billion unique visitors a month -- or one out of every seven people on the planet. And that audience is helping create online stars. Today's fastest-rising celebrities aren't coming out of Hollywood. They're teens hamming it up or breaking it down in front of the computer to create a new kind of entertainment.

That dominance wasn't a foregone conclusion. In 2006, Google paid $1.65 billion for YouTube, which was founded by Karim along with entrepreneurs Chad Hurley and Steve Chen. The sheer might of its parent, though, didn't guarantee success. (How frequently do you check your Google+ social network, for example?) Several factors early in YouTube's existence played out in its favor and set it on the path to becoming the biggest media platform on the planet.

"No one organization has done more for creatives in the whole history of humanity than Google or YouTube," said Will Keenan, who heads the US digital division of television production giant Endemol.

Utilitarian start

YouTube's main attraction at first wasn't the videos you could watch but the files you could store online. The founders wanted to create an easy way to share videos, not necessarily a place to sit back and let others watch them. At a time when video files were large and online storage capabilities for them were scarce, YouTube's appeal was in its role as an early version of now popular cloud-based service Dropbox.

"People were already videotaping at that time, but they had no way to store that content," recalled Zefr cofounder Rich Raddon, whose company helps studios manage their copyrighted material on YouTube. "It was more of an archivist point of view."

Here, Google's resources were key.

"They were really able to benefit from Google's scale," said Laszlo Bock, Google's head of human resources. Bock started at Google in 2006, the same year the search engine bought YouTube. For Google, the challenge was finding a balance between getting involved enough to be helpful but not a hindrance.

One of Google's perks was its arsenal of technology. The infrastructure needed to sustain heavy usage was daunting for a startup but not for one of the Internet's biggest companies.

"It was necessary that the platform got bought early by Google because the sheer costs to store and code and stream all that video were massive," said Raddon. Google's data centers around the world distributed content to make it quick to access so viewers didn't have to wait for videos to load. "When you hit play, there isn't that much buffering because that content had been spread out, localized throughout the world."

The un-TV

YouTube was one of many sites striving to be the the Web's home for free video. One way it set itself apart was by letting its users figure out what the site should be, rather than prescribing that YouTube should feel like "real" television.

"A bunch of services out there, they really thought they were going to be TV," said Jim Louderback, who ran multichannel network Revision3 and is now an editorial director of the VidCon conference on online video. "YouTube looked at themselves and said, 'What's going to make it easy for people to share video? We're going to let it be what it is."'

That democratic approach extended to elements reminiscent of social networks. Unlike the inherent distance that rests between TV and its audience, performers and viewers on YouTube could form interactive online communities. YouTube's most successful "creators" quickly learned that being accessible and authentic on the platform was crucial for building a fan following.

In fact, some of YouTube's most memorable videos are of a tearful teen defending Britney Spears and a gangly graduate student singing a song called "Chocolate Rain" in a Barry White-like voice.

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