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Facebook’s Big Push Into Video Comes With a Big Price Tag

By
Tom Huddleston Jr.
Tom Huddleston Jr.
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By
Tom Huddleston Jr.
Tom Huddleston Jr.
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September 8, 2017, 1:03 PM ET
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Facebook has made no secret of its aspiration to build a digital video empire as it looks to further cash in on online video ads.

The company has already made several moves to ramp up its video strategy, including cutting deals for digital TV shows as well as this week’s full rollout of the Facebook Watch tab as the home for all of its original video. It’s been clear for some time that Facebook is willing to spend big money on video, but now sources tell The Wall Street Journal that there is a rough estimate for just how much the company is willing plow into the effort.

According to WSJ, Facebook may spend as much as $1 billion on original shows through 2018, with that number subject to change depending on their initial performance. The new report comes a few months after WSJ also reported that Facebook would be willing to pay up to $3 million per episode for potential high-profile shows—an amount that rivals the price of top shows on premium cable channels—as well as smaller outlays for original sitcoms and other scripted shows.

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That’s a large commitment from Facebook, especially considering that it was reported to pay $250,000 for half-hour, scripted shows (and $10,000 to $35,000 for short-form programming) when it signed deals with digital outlets like Vox Media, BuzzFeed, ATTN, and Group Nine Media earlier this year for online programming to fill Facebook Watch. Apple, another tech giant preparing to compete for digital video viewers—was also recently reported to be planning to spend nearly $1 billion on its own original TV shows over the next year.

Apple and Facebook clearly both have the cash to quickly ramp up in video, but they would both still be spending far less than leaders in the streaming entertainment like Netflix (spending $6 billion on original programming this year alone) and Amazon ($4.5 billion).

So far, Facebook has made mostly small waves when it comes to original and exclusive TV programming, including snagging the rights to unscripted series such as a reality show following the family of NBA rookie Lonzo Ball as well as a docuseries based on the popular blog Humans of New York. The company has even looked at picking up the rights to scripted shows that aired during previous seasons on traditional networks, while Facebook also has deals in place for streaming live sports, including MLB games and European soccer, as well as e-sports competitions.

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