Facebook’s video monetization plan is here,Video has taken over Facebook, with daily views on the platform growing four-fold to a whopping four billion in just a year. But until now, video creators haven’t had a way to make money on the platform.That changes today. The company introduced its plan to monetize videos and share the revenue with creators. Facebook's revenue split with creators is the same as YouTube’s: 55% of the money earned from ads goes to the creator and 45% to Facebook. The program begins with “a few dozen” partners, including Tastemade, NBA, Hearst, Funny or Die, and Fox Sports.“Partners say they’d publish a lot more if they could get benefit of distribution but also make money,” says Dan Rose, vice president of partnerships at Facebook(FB).Facebook's revenue split is slightly more complicated than YouTube’s “pre-roll” ads that play before videos. That’s because Facebook videos play automatically with the sound off. Auto-play pre-roll ads would annoy users, so the company created a whole new environment to show people videos, and in turn, video ads.
Facebook will split revenue from ads watched between all videos watched in a single session, determining the payouts by how long the viewer spends with each video. So, if you watched a one-minute video from Funny or Die and a four-minute video from Fox Sports with an ad in between, Funny or Die would get a fifth of 55% of the ad revenue and Fox Sports would get four-fifths of the 55% of revenue.
Despite its early success, Facebook faces challenges on its road to video dominance. For one, YouTube, which has been the only video platform with scale for a decade until Facebook came around, will not give up easily. The platform has been fighting to keep its prized creators on YouTube, offering bonuses for anyone signing an exclusive contract. And YouTube is not the only player competing for premium video content. The overflowing bucket of TV ad dollars is too great a prize for any web platform to pass up.