Apple and Facebook Create Streaming TV; Will Advertisers Bite?

As if viewers didn’t have enough claims on their attention, soon Apple and Facebook will become TV studios. And unlike the programming on Netflix, these series will definitely carry ads.

News broke this week that Apple is bringing a $1 billion checkbook to Hollywood, shopping for original ideas. It’s no surprise to Apple-watchers, since the company hired two TV execs (Jamie Erlicht and Zack Van Amburg) away from Sony in June. Word is that Apple wants to spend that full billion in one year, but the final shape of the project remains a mystery. It seems unlikely it will be a subscription service—Apple must know there are enough of those already—but instead programming that’s available exclusively on Apple devices.

Apple’s recent efforts at programming—Planet of the Apps and Carpool Karaoke—didn’t generate much buzz, so Apple is certainly refocusing this time. Reports indicate Apple is looking to release up to 10 new shows this year. With cash and investments totaling $260 billion, Apple can afford to finance this project as long as it takes to build an audience.

This news breaks just as Facebook launches its first slate of original streaming shows. The social network has been moving aggressively on video for years, with this the next big summit to climb. Facebook created a Watch tab just for video, and is populating it with content like Returning the Favor with Mike Rowe and live Friday night MLB games. This play is all about creating inventory for video ads and siphoning budget away from TV. CollegeHumor co-founder Ricky Van Veen is heading the original video push. Look for Facebook to focus on reality shows, melodramas, and comedies that appeal to 17- to 30-year-olds.

The question is how will video advertisers take to these online originals? With Facebook’s viewer targeting abilities and Apple’s network of iPhones, these two stand to be formidable players. Look for traditional TV’s slowly eroding ad market to lose a little more ground.


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