In a bid to compete with YouTube, the dominant force in the internet video market, Facebook has bought video transcoding service QuickFire Networks. QuickFire reduces the bandwidth needed to view online video, without affecting the quality of the video. Its goal, the company states, is to: ‘provide a premium quality, immediate, bandwidth-friendly video experience to consumers.’
Facebook has yet to announced how it will utilise QuickFire’s services and how these changes will affect the user. More content is being watched online than ever before, with users turning away from the TV and towards a smaller screen on a frequent basis. Last year the Interactive Advertising Bureau reported that, for the first time, internet ad revenues have passed those of broadcast TV, so it was surely only a matter of time before the social media behemoth seriously entered the game.
Facebook has over one billion video views on an average day, and with QuickFire’s technology, hopes to improve delivery of video content to its users and therefore retain users who may otherwise click through to YouTube or similar sites to view content. QuickFire provides the functionality of conversion of different video formats into versions which take lesser bandwidths and could therefore be used to allow users to upload videos directly onto Facebook more quickly, rather than doing so through a third party site.
Facebook will also be looking for opportunities to monetise its video services. QuickFire could allow Facebook to compete against the likes of Google’s YouTube and significantly increase its advertising revenues. In addition to adverts on its website, advertisements also feature before, during and after YouTube-hosted videos. The company boasts more than a million advertisers using Google ad platforms, and in a report by Bloomberg, EMarketer is cited as estimating that online video advertising in the US will grow 30 per cent this year to $7.8 billion, up from last year’s $6 billion.
Facebook users divulge a wealth of information via the website and the company has a rich cache of data – a major draw for advertisers seeking to carefully target appropriate markets. Facebook made a change to the site last year meaning a video will play automatically in a users newsfeed (unless they bother to seek out a change via their account settings) and investing further money in video services means advertisers would likely pay a premium for the site to feature its advertisements.