Battle for Video Supremacy

If you’ve haven’t realized, Facebook is kind of a big deal. Facebook has a market valuation around $350 billion and is competing against the likes of Apple, Google, and Microsoft to be the first company to reach that illustrious $1 trillion mark. The platform is home to more than 1.5 billion users or more than 5 times the population of the United States. Usually companies of this size have slow growth but Facebook is growing faster than any comparable company. Yet, despite their size and success, Facebook has yet it figure out how to get past the next hurdle: Snapchat. If you’ve been paying attention in class, you know Facebook and Mark Zuckerberg are no stranger to pushing the envelope when it comes to innovation and moving forward. They know that videos are where the future is and currently, Snapchat stands in the way of their future.

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“Video could provide the next avenue for growth. Chief Executive Mark Zuckerberg said that Facebook would evolve into a “video-first” company by making video core to each of its apps. Executives predict that within five years, most of what people consume online will be video.”

2012

Facebook has actually been cognizant of the upward trend of videos, dating all the way back to 2012. With over a billion photos shared on Snapchat at the end of 2012, Facebook began to take notice of the upstart app, despite its supposed reputation as a “sexting” medium. Nonetheless, inspired by Snapchat’s success, Mark Zuckerberg and Co. released “Poke,” their own ephemeral messaging app, although it was advertised as an addition to Facebook Messenger. Chances are you never heard of “Poke,” so that tells you all you need to know about its success in the market.

2013

Come 2013, Facebook pretended like Poke didn’t exist and simply tried to buy Snapchat for $3 billion. Although Snapchat (aka Snap Inc.) is now valuing itself at about $25 billion, back in 2013, a $3 billion acquisition would have been the most expensive purchase in Facebook’s history. Retrospectively, it’s clear that the deal would have been terrible for Snapchat cofounder Evan Spiegel but turning down the opportunity to become an overnight billionaire was crazy. He prefaced his decision by saying “There are very few people in the world who get to build a business like this…I think trading that for some short-term gain isn’t very interesting.”

2014

After striking out the first 2 times, Facebook still would not waver. In 2014, they launched another app, Slingshot. Learning from their first ephemeral messaging app mistakes, unlike Poke, Slingshot accounts did not have to be connected to Facebook and had some unique features to differentiate itself from Snapchat. The app released with some initial positive feedback, and designer Joey Flynn was quick to distinguish the key difference between Slingshot and Snapchat. “We don’t see this as a messaging app,” said Flynn. “It’s more along lines of a feed or stream of content.” Whether you want to call it a feed or a messaging app, either way, it was a failure. The app was taken off the App Store a year later in 2015.

2016

Now enter 2016. Facebook tried to buy Snapchat and failed. Facebook launched not one, but two of their own Snapchat clones and failed. This time, Zuckerberg went a different route. Instagram, purchased by Facebook back in 2012, launched its own version of stories, which work exactly like Snapchat stories. Instagram didn’t even try to hide their source of inspiration, as Instagram CEO Kevin Systrom said that Snapchat deserved all the credit for the “stories” idea. After 2 months, the feature had about 100 million active users which is about ⅔ of the total user base of Snapchat, thus making Instagram Stories the first positive attempt at tackling Snapchat.

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With a $25 billion valuation, Facebook knew it was going to take more than one shot to knock off Snapchat. So along with Instagram Stories, this past summer Facebook attempted to acquire Snow, a Korean Snapchat-like service dubbed the “Asian Snapchat.” The app is garnering 10 million new users monthly and touts superior customization over its American counterpart, as Snow has 200 face filters compared to Snapchat’s dozen. Facebook does have competition, as Snow’s growth has made it an attractive opportunity for many Asian tech giants such as Alibaba. While there is uncertainty regarding the possible acquisition of Snow, Facebook has also begun positioning itself so that it might not need to purchase any Snapchat clone or launch any new Snapchat copycat app. Instead of finding a new ephemeral messaging medium, Facebook is attempting to be one. The Verge reports:

“Facebook will expand testing of a new camera in its main app that relies on the very same video and photo filters users of Snapchat enjoy. This includes masks that map to your face and full-frame effects that overlay over the scene. It will also let you either post that content or send it as a direct message to any number of people on your friends list. And in one more Snapchat-like flourish, this photo or video will only remain visible so long as you and your friend talk about it. If you fail to start a conversation in the first 24 hours after it’s sent, the content will disappear.”  

But why video?

So what is exactly so great about video? Facebook wants more people to be content creators. Right now, most social media users are simply content consumers. People aren’t sharing statuses, pictures, or personal content as readily as they are sharing news articles and links to other content. And it’s not only about getting more pictures and videos on Facebook. Images that last for less than 10 seconds have less of documentrial nature than your traditional photograph. They incite conversation and are in the realm of content-creating that Facebook is looking for. And even though Facebook owns Instagram, people rarely post more than one image in a day and some users often go days without posting an image at all. On the other the hand, people send multiple Snapchats each hour and the issue of deleting content because of too few likes doesn’t come into play on Snapchat. So, even if your Facebook feed isn’t 99% video in 5 years as Zuckerberg hopes, do expect the next 5 years to be full of attempts to turn consumers into creators.

 

Sources:

http://www.theverge.com/2016/10/28/13446254/facebook-camera-update-test-snapchat-clone-msqrd
https://techcrunch.com/2016/10/31/facebook-bid-for-snow/
https://techcrunch.com/2016/10/06/instagram-stories-has-100-million-daily-active-users-after-just-2-months/
https://techcrunch.com/2016/10/28/the-new-facebook-camera/
http://www.theverge.com/2014/6/17/5817996/facebook-slingshot-app-vs-snapchat
http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/#5YLE0hNWPkqE
http://www.wsj.com/articles/facebook-profit-jumps-sharply-1478117646
http://money.cnn.com/2016/04/28/investing/facebook-trillion-dollar-market-value/
http://fortune.com/2016/08/02/facebook-snapchat-2/

 

8 comments

  1. finkbecca · ·

    This was a really interesting post. I loved the quote from one of the Snapchat co-founders about selling to Facebook! It’s true, it wouldn’t have been as interesting to just sell the company to Facebook and give it all up. I’ve never heard of Poke or Slingshot, they obviously aren’t picking up momentum in the way Snapchat has. I think it will be hard for Facebook to take over the Snapchat market, the network effects are there. People aren’t going to want to switch platforms because Snapchat is already working for them the way they want and all of their friends are already there. Adding stories to Instagram was definitely their best way of entering the competition, but I don’t think it fully replaces Snapchat for most people.

  2. Great post! I think it’s interesting how video is such a big deal right now, but we did just see that Vine is going to be shut down. I wonder what exactly it is about Vine and its videos that just wasn’t quite enough to help it hang in there and stick around longer. To be honest I was never a Vine user and don’t know that much about it, but wasn’t the length of the videos around the same length of Snapchat videos, just without the filters? Sometimes I do wonder why Snapchat is so popular, though, especially considering you can do many of the same things in Facebook, such as chatting and secret messages that disappear.

  3. fernaneq4 · ·

    Very well cited and very knowledgable! I didn’t even realize Facebook had tried twice to rival snapchat. It’s amazing what Evan Spiegal was able to do especially since the Stanford drop out made the app in his dorm room (not that Zuckerberg didn’t) to send and receive nude pictures. There was also the hiccup of his companies emails being released, which actually helped show how much he had grown since the initiation of Snapchat. I’m an Instagram and Snapchat user and I hope they can both coexist in the market. Facebook owns too much they need to simmer down! Great read!

  4. polmankevin · ·

    Awesome post! This topic definitely highlights the importance of networks effects. Even in the video messaging market, a market with barely any switching costs, Facebook was unable to steal users from snapchat. A social media market is only as strong as its network of users. Facebook knows this better than anyone, and they proved it multiple times trying to defeat snapchat. I also really appreciated your point about Facebook’s goal to generate more video content on their site. I honestly can’t remember the last time I posted something on Facebook. Sure I’ve shared articles and been tagged in pictures, but I haven’t uploaded anything in a very long time. Video could help them regain the momentum their news feed once had.

  5. What a fabulous, in-depth post.!

  6. Wow I had never heard of Poke or Slingshot. I think Facebook’s new video feature might be effective. It won’t overtake snapchat because that’s a fun app and Facebook isn’t really about that but I think it could draw in an older crowd.

  7. mashamydear · ·

    I really enjoyed reading this! Thanks for mapping out the history of Facebook’s attempts to integrate video into their platform, it gave a really nice background into their current positioning today. I think Facebook will face a lot of challenges in getting their users to use Facebook differently. Snapchat’s video feature was embedded within the platform since day 1, and people associate Snapchat with that functionality. I think people use Facebook more for news and keeping in touch with their friends, so repositioning it is going to be a challenge to say the least. Why would users start posting stories on Facebook when they probably already have a Snapchat account or an Instagram account? Video is just more synonymous with Snapchat in that respect. I personally think that Facebook should focus on its potential to be a news source, instead of mimicking competitors and integrating features that don’t align with the core competencies of their platform.

  8. Awesome post! I knew that Facebook had tried and failed to purchase Snapchat, but I wasn’t aware of their failed entrepreneurial efforts to create similar products. That really makes Facebook’s Instagram and the creation of Instagram stories even more interesting! I still think though that the platforms, while functioning similarly, have different uses. Snapchat has a sillier vibe, while Instagram stories might show a “behind the scenes” peek into what goes into creating a perfect photo. While Snapchat has lots of filters, I really like that Instagram stories offer you a few different choices of writing tools to doodle on your image. It’ll be interesting to see if users change the ways that they use these products as the Facebook/Snapchat battle continues.

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