Can Facebook's Video Arm Compete With YouTube?

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This week,
FacebookFBannounced
more details of its latest efforts to incorporate ads into its video service after seeing consumption skyrocket over the past few years. The company's increased focus on monetizing its growing video arm has led many to draw comparison
Google Inc.
's
GOOG
YouTube. However it remains to be seen whether or not the social networking giant will be able to tackle the veteran video streaming service.
Quality Content
On Wednesday, Facebook said it was testing a new service that intersperses video ads alongside suggested videos that appear after a user watches a clip on the site. Content creators like the NBA, Fox Sports and Funny or Die have all signed on to become media parters, and marketers have shown a lot of interest in getting their ads shown along side quality content. Additionally, the ads will be played with sound by default, something most companies say is a must since Facebook's videos automatically play without sound.
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Revenue Model
Ad revenue from the videos will be shared out with the content creators, though Facebook's payment scheme differs from that of YouTube. Facebook will keep 45 percent of the revenue generated and content creators will share the remaining 55 percent. That means the creators of all suggested videos that come up alongside an ad will get a piece of the revenue. While this means more videos have a shot at making money, the payout is smaller than what YouTube provides.
Still Some Questions
As Facebook's video service is still relatively new, there are still many questions regarding how the company will best serve both its users and marketers. The company is still working out how to effectively prevent copyright infringement issues as well as setting up ad targeting metrics that will gear the ads toward specific users.
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