Facebook (FB - Free Report) Watch is gaining solid traction, which is evident from an expanding user base. The platform has now more than 720 million monthly and 140 million daily users, who spend at least one minute on Watch.
On average, daily visitors now spend more than 26 minutes on Watch every day, which indicates improved engagement levels. This compares favorably with 20 minutes reported by Facebook during fourth-quarter 2018 earnings conference call on Jan 30.
Enhanced Features to Drive Further Growth
The higher engagement levels can be attributed to the company’s focus on improving features on the platform.
The co-viewing feature “Watch Party,” which enables group members to watch videos together and interact among themselves, increases the time spent on the platform. Notably, Watch Parties generate eight times more comments than regular videos in Groups.
Additionally, the launch of the “on TV” feature in March has been driving user engagement. Further, expanding content portfolio, including original shows and live sports events, have been major attractions.
Facebook continues to offer different tools on the platform that provide superior experience to users. For instance, the “easy way to find groups” tool helps a user to locate groups that have identical taste or interest related to video content or subject.
Facebook is also experimenting with new sections in Watch that can include Watch Party, Premieres and Live videos.
Partnerships to Boost Content
Moreover, Facebook continues to invest in sports video content. The company’s deals with the likes of UEFA, Major League Baseball (MLB), La Liga (for football matches in Indian subcontinent) and International Cricket Council (ICC) are helping it keep users glued to the platform.
Live sports continue to gain immense popularity, and companies like Twitter (TWTR - Free Report) and Amazon (AMZN - Free Report) have also bet big on streaming major global sporting events.
Furthermore, partnerships are helping Facebook expand its video content portfolio. The company has a solid slate of new original shows. While Human Discoveries and Curse of Akakor are set to premiere in July and August, respectively, The Birch and The Limetown will premiere in October.
The creator and digital publisher partnership, announced in March, also expands Facebook Watch’s content portfolio. Additionally, content-related partnership with ProSiebenSat in Germany is expected to boost Watch’s international audience.
Competition for Ad-dollars Continues to Intensify
Facebook Watch is an ad-supported platform. The company has already introduced ad breaks in more than 40 countries and recently launched ad breaks in Canada. Further, the company is set to add support for Kannada, Marathi, Punjabi, Swedish and Telugu over the coming weeks.
However, the competition for ad-dollars is stiff, particularly from Alphabet (GOOGL - Free Report) division Google and YouTube along with other social-media companies like Twitter, Snapchat parent Snap (SNAP - Free Report) and Pinterest (PINS - Free Report) . Amazon’s ad business is also growing at a rapid rate.
This doesn’t bode well for Facebook, as it continues to face issues related to user privacy, fake news and misinformation. Lack of user trust is a major concern for Facebook, as user exodus can lead to declining advertiser base, which will hurt top-line growth.
Nevertheless, the social media giant is taking several initiatives to boost user privacy. Per CEO Mark Zuckerberg, Facebook is taking help from experts to decide acceptability of content. The company is also working on making its products and services end-to-end encrypted and ephemeral, so that user information is not available for long.
Currently, Facebook has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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