Facebook announced a new breed of social apps offered by a range of media brands from Netflix and Hulu to Spotify and the Washington Post at its F8 conference in San Francisco today.
Facebook fan band page
The new apps allow users to consume content within Facebook’s platform and share what they’re watching, listening to or reading in real-time. Advertisers will be able to target Facebook users based on the kinds of content they’ve viewed or shared via the new apps, which will feature “listened,” “watched” and “read” buttons.
New content on Facebook could make it a more compelling sell to marketers. “Anything that increases engagement on Facebook, and captures more user data, will drive up ad revenues,” said Hussein Fazal, CEO of Ad Parlor. “The announcements today definitely hit both of these key points.”
Earlier this week, eMarketer predicted Facebook would earn $3.8 billion from advertising this year.
Details were scarce on how media companies would earn money from their Facebook apps, but a person with knowledge of News Corp’s The Daily’s app said it will be ad-supported and become more integrated with the iPad subscription product over time.
The Washington Post’s Social Reader, for example, allows users who click to opt in for access to a curated selection of stories from the Post (whose CEO Donald Graham is also a Facebook board member) and content partners like the Associated Press, Reuters and Slate. Stories don’t link out to the publisher and can be read within Facebook. And personalized recommendations will be generated based on what users and their friends have previously read, as well as by their interests on Facebook. Content they read on the app will be posted to their profiles and to their friends’ news feeds.
When asked about the revenue model for Social Reader, a Washington Post spokeswoman said, via email, “The focus right now is on getting people to use it.”
Another app, iHeartRadio, lets users add their music listening activity to their Facebook profile and enable their friends to see which artists, songs and stations they’re tuned into. A spokeswoman for Clear Channel, the company behind iHeartRadio, said the company was declining to comment on the revenue model for the partnership.
Spotify CEO Daniel Ek billed its new Facebook app a coup for the music industry.
“Napster didn’t work for the music industry,” he said of his music streaming and sharing service. “We spent the last few years building a service that fairly compensated the music industry.”
On stage after Facebook CEO Mark Zuckerberg, Mr. Ek reported that Spotify users who connect to Facebook tend to listen to more music and a wider variety of music within his service. (Spotify users can see what playlists and artists their Facebook friends are listening to from within the Spotify desktop application.) That social set are also twice as likely to pay for music, he said.
“Social discovery on Facebook is bringing people back to paying for music,” Mr. Ek said of the new Facebook app, which streams what friends are listening to on Spotify straight to Facebook’s mini-feed ticker on one’s homepage.
Netflix founder Reed Hastings — also on Facebook’s board — told F8 attendees that Mark Zuckerberg said he would consider the new social graph a success if it doubled Netflix’s growth forecast. The Netflix app isn’t currently available in the U.S. due to a privacy law that prohibits disclosure of users’ movie-rental history.
While the media apps announcement is generating plenty of buzz, it remains to be seen whether Facebook users will turn to the social-networking site directly for news, despite the tremendous referral traffic (second to Google) it generates.
“I don’t think that when news breaks, people are rushing into Facebook to see what happened,” said Steve Rubel, exec VP-global strategy at Edelman, noting that news junkies are more likely to turn to Google, Twitter and actual news sites.
“In terms of movies and music — those are much more social experiences, but the question is: Will consumers make the mindset shift to say, I’m going to go to Facebook to consume media?” he added.