Facebook (FB) has partnered with HBO to bring the first episodes of the new series Ballers and The Brink to its social media site.
The joint effort is mutually beneficial: While HBO is hoping to attract subscribers, Facebook is trying to expand its role in online video, where Google (GOOG, GOOGL) currently dominates the landscape with YouTube.
In an effort to keep users on its website, FB is increasingly turning its focus to content. The company recently announced a feature called Instant Articles, a feature allowing publishers to publish to Facebook directly, making load times roughly 10 times faster. FB will serve ads against your content for a 30% cut.
Although the Facebook-HBO partnership is a little unusual, I think it’s a good idea for both companies, and it could help continue the FB stock rally, which has seen shares roar 36% higher in the last year alone.
FB Catching Up to YouTube
Facebook is quickly making up ground in the world of online video, and the platform is expected to exceed 2 trillion video views this year, or about two-thirds of what YouTube is expected to do, according to CNBC.
Here’s how this particular FB-HBO arrangement works: The first episode of Ballers, starring Dwayne “The Rock” Johnson, were made available on The Rock’s Facebook page. Meanwhile The Brink has a Facebook page of its own where followers were able to watch the first episode.
The first episodes were put on FB earlier this week, a few days after their HBO premieres. No further episodes will be featured on FB. At least, not yet.
HBO, a subsidiary of Time Warner (TWX), is going up against the likes of Netflix (NFLX) and Amazon (AMZN) Prime Video in a battle for streaming subscribers. Similarly, if Facebook can become a free destination for online video, it can serve ads against those videos or offer ways to buy movies and TV shows through its platform. You can already buy movies directly on YouTube, including ones that are currently in theaters.
Get Hard, the latest Will Ferrell comedy, came out less than three months ago and is already available for purchase on YouTube for the low, low price of $14.99. Of course, the Google Play store — similar to iTunes or the App Store from Apple (AAPL) — also offers a platform from which users can purchase content.
Facebook isn’t really in that game per se. Its videos typically have a maximum length of 20 minutes (exceptions are made of course for partnerships like the HBO one), and many of the video views on Facebook come as a result of an auto-play feature: When users are scrolling through their newsfeed, videos their friends post play automatically.
On the “best practice” page, giving advice for how to create the best Facebook videos, the company emphasizes creating exclusive content, showing that the company really wants to become a destination for video:
“Post exclusive video content to your Page to reward them with something that they can’t get anywhere else.”
Its latest HBO partnership embodies that ideal. Maybe soon users will forget about YouTube and stay within Facebook’s “walled garden” for all their video needs.
We’re not there yet, obviously, but the day might come sooner than we think.
As of this writing, John Divine was long shares of GOOG stock, GOOGL stock, and AAPL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
