The battle over video: is Facebook going after Netflix or YouTube?

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Zuckerberg hopped on the Q4 earnings call yesterday (the company beat the $8.51 billion revenue estimates by a cool $300 million) and gave some much-anticipated insights into Facebook’s video tab and overall video strategy. But what he said led to some confusion.

Recode’s headline was “It’s official: Facebook wants to be your next TV.” Well, does it?

Kurt Wagner explains: “Now Facebook is saying, out loud, that it doesn’t just want to compete with TV. It wants to be your TV…The idea of episodic content, stuff that gets people to come back week after week, seems like a key priority,” and concludes that Facebook is officially becoming a media company.

But Recode rival TechCrunch has a different take. In Facebook plans to be more like YouTube than Netflix as it pays for video, Josh Constine argues that “essentially, Facebook is more interested in the YouTube model of collecting tons of quick video clips than investing in long-form shows or films like Netflix.”

So which is it? Is Facebook’s end-game to compete with Netflix or YouTube? Is the company going after original long-form content or trying to turn clips into clicks?

Constine argues that despite Facebook’s conversations with studios, the focus is short clips. It’s not just him – Facebook’s CEO said it is “the primary focus for the foreseeable future,” and his CFO explained the company is going slow – “we’re certainly going to be seeding content to get the ecosystem going. That’s not about doing big deals…” We all know there’s no premium content without big deals.

Now while this choice makes sense for an ordinary company, this is Facebook we’re talking about. And my argument is that Facebook does not have to choose.

Consider this: It’s clear Facebook wants to become the main content hub for its 1.8bn users. Video is a “megatrend,” as Zuckerberg said on the call. Now put two and two together, and it becomes clear that Facebook would love to take on both YouTube and Netflix (and Google, and Amazon! and anyone else competing for user attention).

It’s just incredibly more difficult to shift to long-form original video content. To become our next TV, Facebook will have to take larger risks. Investors want steady, fast growth, and that’s easier for Facebook to do with a YouTube model, at least from its current position. And so, the caution sounded by Facebook CEO and COO was not strategic; it was meant to soothe investors.

Reading between the lines, while both the Recode and TechCrunch headlines are correct, I think Recode’s message is the bigger news. There’s nothing earth shattering about Facebook’s desire to monetize short videos. But with the company seeing video as a megatrend, its new video tab is not about monetizing short clips. It’s about trying to become your main video content hub.

To do so, Facebook will look at content strategies, technological solutions, and — perhaps most importantly – advertising and other business models — that allow the internet giant to compete with other media behemoths. Hold on tight!