Facebook has changed the way people communicate. Now it’s poised to change the way hundreds of millions of people consume and share their entertainment.
Facebook’s deal with Skype [and the Google+ Hangouts feature] can easily be viewed at just the latest evolution in social media. Rather than people typing messages they can now video chat. However, the introduction of video calling by the two largest digital giants is not simply to allow people to chat to each other, the short term ambition by Facebook (at least) is to allow people to share entertainment videos. Google, the owner of YouTube, no doubt has the same idea.
Facebook’s deal with Skype is another step in Mark Zuckerberg’s journey to use his social network to create an entertainment video-sharing economy. This economy will be funded by video ads and subscriptions and has the potential to usurp legacy broadcasters as well as established online video giants like YouTube.

How could this happen?
Well, firstly, Zuckerberg has said the video entertainment and communications on Facebook and elsewhere in the social-media universe is poised to explode. Video marketing will play a huge part of this. Secondly he has said, “It’s all about the rate at which they [Facebook users] are sharing more stuff”, which is exponentially and doubling annually. The Facebook CEO knows it is vital Facebook gets to the dance floor first and creates a system that generates money flow around entertainment, information and marketing video. There may even be a small levy involved for ‘premium’ services.

It’s now about connecting apps
Zuckerberg explained at the Skype announcement that while the last five years have been about connecting people, the next five years will be about connecting apps. These apps will, in turn, connect consumers to video content – whether entertainment or marketing content.
Facebook’s relationship with Microsoft remains important. Microsoft is an early investor and shareholder of Facebook. It also owns Skype and is said to be bidding for Hulu (which already has nearly a million paid service users).
Facebook is also very friendly lately with Netflix, a company that is successfully growing its video sharing and sales using social apps. Netflix founder & CEO Reed Hastings was recently appointed to the Facebook board.

The bucks start here
There is no doubt that Zuckerberg wants to use Facebook more as a platform for millions of people to share, discover and view movies and other video, including TV shows, sports events and documentaries.
Driving all this is the potential to earn vast sums of advertising dollars. Video advertising online is still in its infancy, but it’s where a lot of the cool, creative stuff is happening. At present, video represents roughly 3 billion of the 31 billion dollars spent online by US advertisers. Zuckerberg & Co. know that this imbalance will soon shift the other way and want to be ready to be there when the money starts falling from the trees.

email

You may also like: