Per The Wall Street Journal (WSJ), Facebook Inc. (FB - Free Report) may invest about $1 billion in original content over the next year. However the budget may vary depending on the initial response it garners, adds WSJ.
It was reported earlier that the company is likely to shell out $10,000 to $35,000 for each short script show and for shows with duration of 30 minutes (owned by Facebook), it is ready to spend as much as $250,000.The company also apparently plans to shell out as much as $3 million per episode for high quality content. The surge in budget reflects the company’s eagerness to ramp up its presence in the growing video streaming industry.
Moreover, it seems like Facebook is followingthe likes of tech-giant Apple (AAPL - Free Report) ,which plans to invest the same amount in 2018 to boost original programming. However, the investment is miniscule compared with other dominant names in the video streaming industry. Reportedly, for 2017, peers like Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) and HBO have budgets of almost $6 billion, $4.5 billion and $2.5 billion, respectively. Moreover, for 2018, Netflix has increased its budget for original content by $1 billion to $7 billion.
Besides, the company’s rival Snapchat is also ramping up its efforts to foray into the original content space.
We believe Facebook’s efforts to further its push into the world of original content will boost its subscriber base and help to sustain the momentum in its shares. Notably, Facebook hasgained 48.6% year to date, substantially outperforming the industry’s 20.2% rally.
Facebook in the Original Content Space
Facebook unveiled a new tab called “Watch” last month, which is now available to people in the U.S on mobile, TV apps and desktops and is exclusively designed for viewing videos.
Reportedly, the company has a lineup of shows ranging from cooking shows to documentaries to reality shows on Watch. Per reports, some of the shows that will be available on Watch include Tastemade’sKitchen Little (cooking show for kids), National Geographic’s Safari Live, NASA’s Science @ NASA, Gabby Bernstein (motivational series) and A&E’s Bae or Bail (reality show). Also, Major League Baseball games and Liga MX games will also be available on Watch.
Moreover, in May, Facebook reportedly brought on board several content creators (which target mostly millennials) like ATTN, Vox Media, BuzzFeed and Group Nine Media to produce shows for its upcoming video service.
The social media giant had also unveiled a new TV app to enhance video-viewing experience,The app is available on app stores on Apple TV and Samsung Smart TV, and will be rolled out on Amazon Fire TV and to other platforms gradually. Also, Facebook hired an ex-MTV executive, Mina Lefevre, to spearhead its video viewing efforts.
Currently, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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