Snap and Facebook Watch are ramping up their video investments (FB, SNAP)

global reach on social video platforms Business Insider Intelligence

Snap wants to fund production of new Snap Originals for Discover, in exchange for IP ownership.Last year, Snap launched Snap Originals, a slate of high-quality shows shot in mobile-first vertical format, and monetized with unskippable ads. Snap's new willingness to fund shows could help it attract content producers, particularly those who might be wary of the app's ability to drive meaningful viewership. Previously, Snap was offering ad-share deals as compensation, while content producers footed development costs. In this new development round, Snap is reportedly offering to pay companies $40,000 to $50,000 per episode for original shows, where most series will have 10-12 episodes with run times of 5-7 minutes per episode. That would mean that Snap is willing to pay out $400,000 on the low end, or as much as $600,000 per show.
Facebook wants to partner with studios to develop more influencer-led shows for Facebook Watch, spanning entertainment, news, and sports, via a new incubator program.Facebook is likewise funding production reportedly prepared to pay around $200,000 for eight episodes, or about $25,000 per episode though isn't necessarily seeking ownership. The platform is instead likely to license exclusively for about three months before rights would return to the production partner. By partnering with influencers with large audiences on Facebook, Instagram, or other platforms, Watch could tap into largely pre-existing communites of social users. Such traction is more likely to happen organically, rather than forcefully, for example, by inserting video streams into a user's main feed, a tactic Instagram said it would use to direct people to IGTV. The influencer push also highlights Facebook's desire to drive community around video: Beyond view and follower counts, Facebook has said it makes renewal decisions for Watch based on how well a show drives active engagement (likes, comments, shares) among users.

The planned content investment comes as both companies are looking to drive more intentional viewing behavior to video on their platforms.Mobile is the primary or only site of engagement for users of most social platforms. Snapchat is mobile-only, and the vast majority 93% in Q4 2018, up from 89% year-over-year (YoY) of Facebook's advertising revenue comes from mobile activity, highlighting the importance of smartphones for the platform.

And users are becoming more comfortable viewing video on mobile devices: Mobile plays on smartphones topped 50% of all video starts globally for the first time last year, up 13.2% YoY, per Ooyala. In North America, smartphone plays accounted for 56% of all video starts, up 4% YoY and up 14% since Q2 2016. Social platforms like Snapchat and Facebook likely enacted thse content pushes to take advantage of the growing mobile video trend.

These expansion efforts are still mostly experimental, as platforms try to determine what content performs and use that insight to dynamically tweak content investment and strategy.Facebook Watch, in particular, has struggled to drive a high proportion of its addressable user base to engage with video there: 75 million users just 5% of its total DAU spent 20 minutes a day (nonconsecutively) viewing video on Watch.

However, both Facebook Watch and Snapchat have had some early, yet limited, success in driving users to engage with some shows. For example, Snapchat's original short-form original docs-series Bringing Up Bhabie drew more than 10 million views within 24 hours of its February 4 premiere on the app, per TMZ. And Watch's most popular show " Red Table Talk " hosted by Jada Pinkett Smith, now boasts 4.6 million followers on Facebook.