Facebook CEO Mark Zuckerberg said the company is seeing video expand dramatically across its ecosystem, but admitted that while its dedicated Watch service is growing quickly it is still “well behind YouTube”.
However, he said that Facebook has had “challenges” reconciling passive video consumption with “what people uniquely want from us, which is meaningful social interactions.”
“Video has grown a lot on our services, but we hit a dynamic where when it grows in Feeds and Facebook and Instagram, it displaces some social interactions and people tell us it makes the experience less valuable even though they’re spending more time on it.”
The company’s solution to this has been to build separate video experiences with the launch of Facebook Watch and Instagram’s IGTV – a strategy that seem to be paying off, even though these services still trail their established rivals.
“What we found is that when people seek out video experiences intentionally, they don’t displace social interactions as much and the quality of the experience is generally higher,” said Zukerberg.
“Watch has really hit its stride and it’s growing incredibly quickly, about three-times in the last few months in the US alone. IGTV is still earlier in its development, but I think we have a good sense of how to make it work as well.
“To be clear, these services are still well behind YouTube, which is our primary competitor in this space, but they’re growing very quickly.”
Another issue flagged by Zuckerberg on the call was that video monetises “significantly less well per-minute than people interacting in feeds” – a factor that means as video grows it will displace services that would probably be greater revenue generators for the company.
This is just one of the major shifts Facebook predicted for its business over time, as it noted that the way people are connecting is also moving more to private messaging and Stories.
“People feel more comfortable being themselves when they know their content will only be seen by a smaller group and when their content won’t stick around forever,” said Zuckerberg. “Messaging and Stories make up the vast majority of growth in the sharing that we are seeing.”
Last quarter, Facebook shared for the first time the number of people who use at least one of its apps each month – a metric that Zuckerberg said is a “better way to measure our community over time” as so many people use more than one of Facebook’s apps.
Facebook said it now estimates that more than 2.6 billion people use Facebook, WhatsApp, Instagram, or Messenger each month, and more than 2 billion people use at least one of its family of services every day on average.
As for the main Facebook app, Zuckerberg said the service continues to grow quickly in developing countries and is generally stable overall – “although we may be close to saturated in developed countries.”
For the third quarter Facebook’s revenue grew 33% year-on-year to US$13.7 billion, while its net income was up 9% to US$5.14 billion.
In a statement that accompanied the earnings announcement, Zuckerberg said: “Our community and business continue to grow quickly, and now more than two billion people use at least one of our services every day. We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”