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Facebook to Bring Lip Sync Live to Increase User Engagement

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Facebook (FB - Free Report) is trying to maintain its “cool quotient” in order to prevent users from shifting to other applications. The company’s recent announcement to launch a Lip Sync Live feature is a step toward that direction.

The Lip Sync Live option that will be available while streaming a Facebook Live video will let users lip sync to a popular song alone or with friends, add descriptions and customize the video with filters and effects.

Notably, the feature will be a direct competitor to the highly popular video creation and live broadcasting app, Musical.ly, which has a dominant younger user base.

Facebook’s recent move is thus seen as a way to lure young users to the platform as the popularity of the main platform among them is on the decline per a recent report.

Moreover, we believe with videos becoming the primary mode of communication, Facebook is trying to capitalize on the trend with such additions.

Notably, Facebook has gained 9.4% year to date, while the  industry declined 2% over the same time frame.

 



 

Video Push

Facebook has been aggressively promoting Live in order to boost its top line. The company has taken a number of initiatives to capture the opportunity presented by ever-increasing video viewing on social media platforms. It has also been improving its scope of monetization through video views on its platform.

CEO Mark Zuckerberg had stated last year that, “video can serve as a touchstone for building community and helping facilitate interaction, then that's the thing that we feel like we can uniquely do that.”

Further, management notes Stories to be a big part of the future of video sharing. Probably, it is the reason why the company will start testing options for adding music to Facebook Stories in the coming months.

We believe the addition of such engaging features on the main platform will help the company drive “meaningful engagement” among users. Moreover, it could have a strong influence on
Generation Z, the upcoming market for advertisers and marketers.

However, higher investments on video and increase in royalties that the social media giant is offering to major record labels and music publishers to host content on all its platforms will remain an overhang on margins.

Zacks Rank & Stocks to Consider

Facebook currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Twitter (TWTR - Free Report) ,  NetApp Inc. (NTAP - Free Report) and NVIDIA Corporation (NVDA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for Twitter, NetApp and NVIDIA is projected to be 23.1%, 12.1% and 10.3%, respectively.

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