Watch Out, YouTube! Facebook Wants Your Video Action
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It was only a matter of time before Facebook figured out a way to make money from the videos that are played on their platform. As Fortune points out, before now, video creators didn’t have a way to make money on the Facebook platform. That all changes today, with Facebook’s new plan to monetize videos and share the revenue with creators. The revenue arrangement is the same as YouTube’s: 55 percent of the money earned from ads goes to the creator, and 45 percent goes to Facebook. So far, the program has a couple of dozen partners who have signed up, including the NBA, Fox Sports, Hearst, and Funny or Die.
Related: Facebook gaining ground on YouTube in video ads, report says
Prior to the new plan, Feed videos would only play mutely until the user clicked on them. Now, when users play a video on mobile, they will get a feed of “Suggested Videos.” It’s not until a few of these videos play, that the user will see an actual ad. And these ads, unlike Facebook’s autoplay videos, will play with the sound turned on.
In the past few weeks, the social media giant has tested the “Suggested Videos” product with a small number of iOS users. Today the test goes wider, and will eventually expand to include Android and desktop users.
Unlike YouTube, which gives content creators 55 percent of the revenue from the ads it plays before videos, Facebook will divvy up the 55 percent in revenue among multiple creators or partners. For example, if you watched a three-minute video from the NBA, and a two-minute video from Funny or Die, the 55 percent in ad revenue would be split proportionately between the NBA and Funny or Die.
Related: Will Facebook Kill the News Media or Save It?
Industry experts fully expect video—especially mobile video—to be a major source of revenue for Facebook in the future since users already deliver four billion videos views daily. The company made $3.3 billion in ad revenue in the first quarter of 2015, 73 percent of it from mobile ads alone. For now, Facebook says it is focused on shorter video formats, not long-form video formats like TV shows and movies.
To date, YouTube has been the only major player in user-posted video, but Facebook is stepping up its game. It just announced to advertisers the option to pay for video ads only after a video has played for 10 seconds. It’s a response to announcements that Snapchat and Twitter are rolling out video divisions too. In May, Spotify added video-streaming to its music-streaming app. And Hulu, Yahoo, and AOL are also pushing their video strategies.
For content providers, it’s a new way to play—and pay.
4.2 Million Uninsured People Could Get Free Obamacare Plans
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About 4.2 million uninsured people could sign up for a bronze-level Obamacare health plan and pay nothing for it after tax credits are applied, the Kaiser Family Foundation said Tuesday. That means that 27 percent of the country’s 15.9 million uninsured people could get covered for free. The chart below breaks down the eligible population by state.
Takedown of the Day: Ezra Klein on Paul Ryan's Legacy of Debt
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Vox’s Ezra Klein says that retiring House Speaker Paul Ryan’s legacy can be summed up in one number: $343 billion. “That’s the increase between the deficit for fiscal year 2015 and fiscal year 2018— that is, the difference between the fiscal year before Ryan became speaker of the House and the fiscal year in which he retired.”
Klein writes that Ryan’s choices while in office — especially the 2017 tax cuts and the $1.3 trillion spending bill he helped pass and the expansion of the earned income tax credit he talked up but never acted on — should be what define his legacy:
“[N]ow, as Ryan prepares to leave Congress, it is clear that his critics were correct and a credulous Washington press corps — including me — that took him at his word was wrong. In the trillions of long-term debt he racked up as speaker, in the anti-poverty proposals he promised but never passed, and in the many lies he told to sell unpopular policies, Ryan proved as much a practitioner of post-truth politics as Donald Trump. …
“Ultimately, Ryan put himself forward as a test of a simple, but important, proposition: Is fiscal responsibility something Republicans believe in or something they simply weaponize against Democrats to win back power so they can pass tax cuts and defense spending? Over the past three years, he provided a clear answer. That is his legacy, and it will haunt his successors.”
Number of the Day: $300 Million
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Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, wants the agency to be known as the Bureau of Consumer Financial Protection, the name under which it was established by Title X of the 2010 Dodd-Frank Wall Street reform law. Mulvaney even had new signage put up in the lobby of the bureau. But the rebranding could cost the banks and other financial businesses regulated by the bureau more than $300 million, according to an internal agency analysis reported by The Hill’s Sylvan Lane. The costs would arise from having to update internal databases, regulatory filings and disclosure forms with the new name. The rebranding would cost the agency itself between $9 million and $19 million, the analysis estimated. Lane adds that it’s not clear whether Kathy Kraninger, President Trump’s nominee to serve as the bureau’s full-time director, would follow through on Mulvaney’s name change once she is confirmed by the Senate.
Why Trump's Tariffs Are Just a Drop in the Bucket
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President Trump said this week that tariff increases by his administration are producing "billions of dollars" in revenues, thereby improving the country’s fiscal situation. But CNBC’s John Schoen points out that while tariff revenues are indeed higher by several billion dollars this year, the total revenue is a drop in the bucket compared to the sheer size of government outlays and receipts – and the growing annual deficit.
Bank Profits Hit New Record Thanks to 2017 Tax Law
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Bank profits reached a record $62 billion in the third quarter, up $14 billion, or 29.3 percent, from the same period last year, according to data from the Federal Deposit Insurance Corporation. The FDIC said that about half of the increase in net income was attributable to last year’s tax cuts. The FDIC estimated that, with the effective tax rates from before the new law, bank profits for the quarter would have risen by about 14 percent, to $54.6 billion.