ANGELES ó Facebook and Snapchat have overtaken the
home pages of Yahoo and Google as the front door to the
Internet for hundreds of millions of people. Now, the
two rivals are pursuing a much bigger challenge:
surpassing television to become the dominant gateway to
firms see video as the next frontier of their business.
U.S. adults still spend four times as much time watching
TV as they do digital video. And U.S. advertisers put
seven times as many dollars toward TV ads as they spend
aging of millennials, and Gen Z behind them, naturally
could close the gaps. But app makers and video producers
will have to make strides in creative and business
they stand a chance is being tested in small studios and
corners of offices around the world, including in
on a recent Friday afternoon, makeup artist Amber
Talarico brushed eyeliner onto Kristin Lai. As two
digital cameras and a computer broadcast the scene to
thousands of Facebook users, Talarico slowly and without
commentary dressed Lai to resemble a creepy doll from a
transformation show "Becoming" has drawn
almost 200,000 viewers an episode (3 seconds counts as a
view on the social network; TVís Nielsen ratings
require one minute of viewing). "Significant,"
Jon Handschin says of the viewership as he turns around
on a couch to watch Talarico work.
donít think the numbers have to be millions,"
said Handschin, president of online media company
his guess is right in the long run, Moviepilot and its
roster of shows for Facebookís live-streaming service
could turn what it calls Super News into a must-watch
channel for movie junkies (the company describes it as
the CNN for nerds).
now, Moviepilotís Super News division is among the
first attempts at designing a media business on Facebookís
or Snapchatís video systems.
shows are hitting Facebook from cable companies such as
E! and business news provider Cheddar. Individuals are
making it central to entertainment start-ups, such as
Holly Springs, Ga., resident Brittany Sparacio, who
three months ago started plucking pearls from oysters
live on Facebook and selling the jewels online.
have customers say they will drop their cable and
Netflix for this," Sparacio said in a conversation
over Facebookís chat app. "We go live four or
five times a week, and we sustain 3,000 to 4,000 viewers
is adding perks that appeal to those who treat its live
video platform as a business, announcing Tuesday that it
will allow producers to schedule streams in advance.
Snapchat spokesperson said the Venice company is focused
on fostering video channels through Discover, a featured
section of its app where old guard media companies such
as the Economist and young standouts like BuzzFeed
supply articles and videos.
has co-invested in two media brands exclusive to
Discover. With Vertical Networks, founded by veteran TV
executive Elisabeth Murdoch, itís working on menís
channel Brother and more to come. With Hearst, the
part-ESPN and A&E owner, itís backing lifestyle
Snapchat is this generationís TV, then the brands that
are being built there have a resonance for this
generation thatís really powerful," said Ross
Clark, who was hired to run Sweet. "Itís a place
where real businesses can be built."
said he draws inspiration from TV channel Bravo and
magazines such as Wallpaper and New York. Consumers have
been intrigued. About 15 million viewers a month ó a
third in the U.S. ó tune in to Sweet to learn about
whatís hot in fashion, food and art. LíOreal, Apple
and Gucci have advertised on the channel.
say they want to see more entrepreneurs spin up video
companies that emphasize Facebook, its Instagram
image-sharing app, Snapchat and, to a lesser extent,
Twitch and Twitter.
interest follows years of investment in companies
anchored on YouTube, some of which sold to media giants
including AT&T, RTL Group and Walt Disney.
has come closer than any video app to surpassing TV. But
industry experts say the service is flooded with
competition, associated with on-demand viewing and set
in its style. Facebook and Snapchat represent uncharted
terrain and potentially more lucrative opportunities, so
thatís where money is flowing.
already has backed two young media companies from the
post-YouTube wave: Naritiv, a marketing company now
seeking to develop a consumer brand on Snapchat, and
Nom, a live-video and social networking app aimed at
those who would watch Food Network all day.
investments show greater foresight on the part of media
companies than during the YouTube wave, meaning they
could capture some of the profit that might otherwise go
to venture capitalists.
understand itís not a phenomenon or fad," said
Ynon Kreiz, the former chief executive of Maker Studios,
a digital video company that sold to Disney in 2014.
"This is in broad daylight. No one will be coming
at the incumbents from the back door."
enough uncertainty exists about what approach to take
that industry experts think anyone has a shot to
unresolved issues is which service to focus on. Because
Snapchat displays videos in full screen with sound, they
must attract viewers differently from those appearing on
the Facebook news feed, where videos are silent until
viewers click on them. Snapchat also lacks
live-streaming, and videos disappear from the service
after 24 hours. And regardless of where companies start,
they might have to expand quickly anyway. Sweetís Ross
said heís considering the payoff of launching a print
magazine or a subscription box filled with featured
being one platform only a limit on potential?" said
Erin McPherson, a former digital video executive at
Yahoo and Maker Studios. "Itís too soon to tell.
In my view, the real win ultimately would be developing
content that can be used across platforms."
Snapchat investor Jeremy Liew of Lightspeed Venture
Partners said heís looking for start-ups to provide
"ambient" video, things like ESPN, daytime
talk shows and QVC that air as people move about their
homes and jobs. Such programming would stand out from
the more mentally intensive video on Netflix, Hulu and
Tung, managing partner at investment firm GGV Capital,
said entrepreneurs could bring "offline"
activities to an interactive live broadcast, such as a
game show revolving around "Truth or Dare."
Another big opportunity is integrating online shopping
and two-way chat into shows in a way never before
possible, he said.
is in the early stages of devising a formal way for
publishers to make money from video on its service.
Snapchat doesnít have any revenue offering for third
parties, save for partners on Discover with whom it
splits ad revenue. Thatís a significant concern thatís
led Sam Landman, a managing director at Comcast
Ventures, to hold off on backing recent media start-ups
heís seen. But heís optimistic that business plans
rooted in a mix of selling ads, subscriptions and
syndication rights will eventually make sense.
do believe people are willing to pay for content,
certainly if they are passionate about the brand,"
executives at companies built upon YouTube said success
came down to who starred in and made the shows.
Nurturing people popular on a certain app and
integrating them into productions might be the best way
Moviepilot, Handschin has been satisfied with Talarico,
a nine-year veteran of makeup and special effects, and
the rest of the "Becoming" crew.
chimes in at weekly production meetings, lobbing
questions about how they might involve guest stars, be
more cost-efficient or be more responsive to viewer
comments on the Facebook stream.
passes on lessons, such as talk shows donít seem to
draw viewership on Facebook Live, but flying drones and
playing games work well.
Moviepilot launched in 2012, co-founders Handschin and
Tobi Bauckhage deliberately tied the firmís fate to
heavy reliance on Facebook. They have no plans to back
off. Itís one reason Handschin doesnít want to study
or hire from traditional TVís top ranks.
would corrupt us into something we wouldnít want to
succeed at being," he said. "Iím looking for
the 22-year-old who can create the most astonishing
anything, he worries about his producers leaving to
start their own online ventures because he would if he
were them. As the hourlong production of
"Becoming" wrapped up, producer Sarah van der
Watt said Facebook Live does have a unique perk.
need for editing," she said. "Weíre just