Facebook Execs Hint at Long-Form Video Licensing Deals as Company Nears 2 Billion Monthly Users

Facebook is getting close to surpassing two billion monthly active users, and now wants to target these users with long-form video content through the recently-introduced video tab.

We are looking at kickstarting an ecosystem for longer-form content on Facebook,” said Facebook CFO David Wehner during the company’s Q1 2017 earnings call on Wednesday.

Facebook CEO Mark Zuckerberg echoed these remarks, saying that the goal of these efforts was to create “some anchor content” for the video tab, which Facebook introduced as part of its app last month.

Zuckerberg didn’t comment on what kind of video programming Facebook is looking for, but said that the company may eventually pursue deals similar to Twitter’s NFL partnership. “Sports is probably something that we will want to try at some point,” he said. The idea was to establish Facebook as not just a place where people would go to catch up on the news and their friends, but also a destination for video viewing.”

Wehner stressed that Facebook was looking to eventually move to a revenue sharing model for long-form video content, but that it was willing to invest some of its own money up-front to get these efforts started — something he called “de-risking it or some of our content-partners.”

Asked when those licensing investments are going to show up on Facebook’s balance sheets, Wehner said that the company’s video expenses “will step up after 2017.”

Wehner said that video impressions grew 32% in Q1. That would be lower than in other quarters, something that Wehner in part attributed to recently-instituted tweaks that give more weight to longer-form videos in the newsfeed.

These revelations came as Facebook reported its Q1 2017 earnings on Wednesday, which once again included huge user and monetary gains. The social network ended the third quarter with 1.94 billion monthly users, adding close to 300 million in a single year.

Facebook generated a total of $7.86 billion in revenue during the first quarter, compared to $5.38 billion during the same quarter a year ago. Facebook’s net income for the first quarter was $3.06 billion, compared to $1.51 billion a year ago. This equals earnings per share of $1.04, compared to $0.60 a year ago. Analysts had expected revenue of $7.83 billion.

Much of Facebook’s profits was once again driven by mobile advertising, which now represents 85% of all of Facebook’s advertising revenue. Interestingly, the company stopped breaking out its number of mobile users — essentially, for Facebook, almost every user is now a mobile user.

Facebook still makes most of its money in North America, where the company generated $17.07 of revenue with each and every user during the quarter, an increase of 37% over the same quarter last year. In Europe, revenue per user grew almost equally strong, shooting up 36% to $5.42 per head.

Zuckerberg used Facebook’s earnings call Wednesday to reiterate the company’s efforts to fight misleading stories, and prevent users from sharing violence and otherwise offensive content. Earlier on Wednesday, the company announced that it was going to hire another 3000 moderators to review reports of users about inappropriate videos and live streams.

Zuckerberg also gave an update on Facebook’s augmented reality efforts, which include adding camera functionality to all of its apps, and getting users to share photos with stickers and other digital add-ons.

To that effect, Facebook has been heavily copying Snapchat’s stories format, which seems to be working for the company: WhatsApp’s copy of Snapchat Stories has 175 million daily active users, Zuckerberg revealed Wednesday. The company previously announced that Instagram Stories has 200 million daily active users.

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