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Does Facebook Inc. Lie, Cheat, and Steal?

Source: Facebook.

It's an oft-repeated narrative: Facebook (NASDAQ: FB  ) is stealing market share away from Google's (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) YouTube property with its native video-hosting technology. And, to be fair, Facebook is pulling closer to its Silicon Valley brethren. Although Mark Zuckerberg was mum on the video metrics in the recently reported second quarter, Zuck took a victory lap in the prior quarter by noting the social-media behemoth passed 4 billion daily video views.

And while the company did grow substantially over the last year or so, the company boasted views in excess of 1 billion per day in June of last year, the company still trails YouTube in terms of daily views. Even at Facebook's stated Q1 total of 4 billion daily views, it is still only roughly half of YouTube total daily views, which is expected to reach 8 million by the end of this year.

In order to truly eclipse YouTube, however, if that's Facebook's ultimate goal, Facebook will have to work hard to impress the independent content providers that make substantial sums of money from YouTube. And while the company has made some progress on that front, introducing a nascent revenue-sharing policy with some creators, it appears the company has work to do with other large YouTube stars.

Theft, Lies, and Facebook Video
According to an article in Medium from Hank Green, one half of the professional YouTube video creator team VlogBrothers, "Facebook says it's now streaming more video than YouTube. To be able to make that claim, all they had to do is lie cheat and steal." And while I can't personally find anything on record where Facebook has made that exact claim, as the company was rather mum on exact viewage figures in its last reported quarter, Green's concerns are valid and could be a potential barrier from Facebook's long-term growth.

As far as the "lie" charge goes, Green has issue with how Facebook counts those 4 billion views it reports. Unlike Google's YouTube, which typically counts a video as viewed around the 30-second mark, Facebook counts a video as viewed at the 3-second mark. The reason, Green proffers, for YouTube's 30-second rule is to accurately count engagement, which is an appropriate question for Facebook views considering its short counting period and its use of auto-play.

Green posits those two factors are essentially, and deceptively, overcounting views and is a bad comparison for marketers and content creators to judge the service. And while I'm sure Facebook disagrees, it was interesting that Facebook did not report its viewed figure this quarter and has recently added a 10-second option for marketers not sold on its current video metrics.

Cheating and stealing?
Perhaps the most-aggressive charge is the one of stealing. To be fair, Facebook has a legitimate problem with what's called "freebooting." I go into detail about Facebook's serious problem in a prior article, but the "tl;dr" version is many users are essentially stealing YouTube content, removing any credits from the original creators, and posting it on Facebook for likes and traffic. Of course, this is detrimental to the original creators because it cuts them out of the monetization process they deserve for their content.

The cheating charge is perhaps the least serious one, but still has the ability to exacerbate tensions between content creators and Facebook. Right now, YouTube has a more-comprehensive and better-defined monetization model. Facebook is looking at building its revenue-sharing model, but it's a better deal for creators to post on YouTube currently.

On Facebook's site, however, YouTube uploads are essentially kneecapped while natively uploaded Facebook videos receive many more likes, shares, and comments. And while it is important to note Facebook is allowed to tweak their algos in any way, pushing a version that hurts creators makes it harder to attract them in the long run. Essentially, it's reaching in creators pockets and taking their ad-based revenue for any videos on its site.

Although it should be noted people post videos for a variety of reasons and many don't necessarily look to monetize the content, most large content creators do. For Facebook to truly challenge YouTube, it will need to address these difficult issues -- it could start by expanding its revenue-sharing plans. It should be a short-term hit to revenue, but will be more sustainable over the long run.

3 Companies Poised to Explode When Cable Dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names.  Hint: They're not the ones you'd think!

 


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