• by Fritz Brumder , Op-Ed Contributor, March 6, 2017

For well over a decade, the social media giant has expanded, but never lost sight of its central focus as a place for people to share experiences.

Its latest move, television, could either make or break that vision entirely.

To this point, Facebook’s financial growth has been fueled by ads -- mobile and desktop -- being successfully deployed to a growing social graph. Midway through 2016, ads accounted for over $6 billion of revenue per quarter per company earnings.

That’s pennies, however, compared to what it could take in from ad revenue as a television network. Transitioning to Super Bowl budgets.

In December, it was reported that Facebook would pursue original video content and licensed shows to boost the company’s video efforts. Just the other day, it poached an executive from MTV with a keen focus on growing that part of the business.

This new venture has them changing their competition entirely. They’re not duking it out for video eyeballs with Twitter and Snapchat, necessarily. They’re taking on Hulu, Netflix and Amazon.

To a greater extent, the goal is taking on the actual broadcast networks -- ABC, CBS, NBC, etc. Operating in that stratosphere is how Facebook moves from grabbing ad dollars in piecemeal to taking much larger chunks of the pie.

According to iSpot.tv, this year’s Super Bowl put over $420 million into Fox’s pocket, for an audience of a little over 100 million. CBS didn’t even broadcast the Super Bowl and took home over $220 million in the past two weeks.

Facebook’s audience, by comparison, is infinitely larger than anything those networks can offer to advertisers. The company’s Q4 earnings  reported 1.86 billion monthly users, per CNBC. Q4 also added another 70 million active users per day for the site.

Even accounting for language-based and geographic segmentation, there’s a chance that Facebook could deliver Super Bowl-sized audiences in the U.S. for multiple programs. Who else can promise that?

No one. Which gets to Facebook’s biggest advantage.

The power of the social graph

Netflix, Amazon and Hulu don’t have a social graph. Neither do CBS, NBC or Fox.

Facebook can produce a show, stick it into the existing Facebook stream, then have the social amplification accelerated in a major way -- unlike what any other “network” is able to do. If users start watching on Facebook, they start sharing immediately, building the sustainability of programming the instant it’s released..

The long-tail of TV -- shows that are a year or two old gaining popularity as they get added to streaming services -- becomes the norm for Facebook programming.

Facebook also has zero customer acquisition cost, which is its biggest advantage. The entire customer base is already there. When you toss original video content into the feed, there’s no hoping for discovery. The audience finds it because it’s handed directly to them. As it’s done before, Facebook adjusts the algorithm to amplify that conversation, and the show’s a hit!

This isn’t Facebook killing live, either. They have to care about user-generated video and user-generated content as well. It’s the glue that keeps the social graph together.

Facebook’s play here is a move into a different arena, based on what they’ve already built (an enormous social network and audience). That platform needs to remain healthy and unique in order to keep the added value of Facebook to advertisers in this new venture.

But how is it implemented?

As mentioned, Facebook is still hungry for (and needs) personal posts and content. Personal content still has the highest engagement over curated content.

Through its own evolution, YouTube maintained user-generated content that’s raw while also looping into that exact same experience for highly produced content.

Facebook’s challenge is merging these two funnels -- live and pre-recorded content -- in the same way. Where this version of Facebook’s video product happens dictates a lot of whether or not this could work. Is it implemented in a separate app? Another tab? Are you watching right in the feed?

Critically, that’s what could make it really big or screw up a lot of the underlying social graph that provides Facebook so much value as an advertiser. That’s the dilemma the 13-year-old Facebook will always face as it tries to mature.

How do you continue to evolve and increase revenues if you don’t change what your business does and how it brings in revenues? The implementation of this shift for Facebook dictates its success both as a video distributor and as a company.