There are 26 million Amazon Prime video users in more than 200 countries. The company is spending more than 5 billion dollars a year on content, and the service alone brings in more than $2 billion in subscription revenue. In addition to movies and TV shows, it’s positioning itself as an alternative to cable with a mix of on-demand and live programming, including the recently added NBA League Pass.
It’s no wonder Facebook wants a piece of that pie. The social media giant is in talks with HBO, Showtime, and Starz about adding streaming video. Facebook would offer subscriptions to these channels which users would watch within the Facebook platform.
It would be a big leap for Facebook. In the past, it’s relied primarily on user-generated content, and it’s amassed a significant audience by doing that: 8 billion average daily views and 3 billion hours of video watched monthly. Facebook has made billions selling advertising up against that watch time, but adding streaming channels gets them into the subscription business.
Facebook’s had limited success in convincing media companies to create content for them. It’s also tried to make some big plays in this area – like unsuccessfully bidding $600 million to stream Indian cricket matches.
If the deal comes together, Facebook would likely buy access to HBO and the other streaming channels and recoup its investment by keeping some of the subscription costs. That is similar to how competitors such as Amazon and Apple do it, keeping between 15 and 30 percent of subscription revenue.
Stay tuned to see if Facebook become the new platform for ‘must-see tv’.