Facebook Allegedly Killed Its Own Streaming Service To Help Sell Netflix Ads (gizmodo.com) 14
An anonymous reader quotes a report from Gizmodo: Do you remember Facebook Watch? Me neither. Mark Zuckerberg's short-lived streaming service never really got off the ground, but court filings unsealed in Meta's antitrust lawsuit claim "Watch" was kneecapped starting in 2018 to protect Zuckerberg's advertising relationship with Netflix CEO Reed Hastings. "For nearly a decade, Netflix and Facebook enjoyed a special relationship," said plaintiffs in filings (PDF) made public on Saturday. "It is no great mystery how this close partnership developed, and who was its steward: from 2011-2019, Netflix's then-CEO Hastings sat on Facebook's board and personally directed the companies' relationship"
The filings detail Hastings' uncomfortably close relationship with Meta's upper management, including Zuckerberg and Sheryl Sandberg. During these years, Netflix was allegedly granted special access to Facebook users' private message inboxes, among other privileged analytics tools, in exchange for hundred-million-dollar advertising deals. This gave Facebook greater dominance in its all-important ad division, plaintiffs allege, so the company was fine to retreat from Netflix's streaming territory by shuttering Watch. In 2017, Facebook Watch began signing deals to populate its streaming service with original TV Shows from movie stars such as Bill Murray. A year later, the service attempted to license the popular '90s TV show Dawson's Creek. Facebook Watch had meaningful reach on the home screen of the social media platform, and an impressive budget as well. Facebook and Netflix appeared ready to butt heads in the streaming world, and the Netflix cofounder found himself in the middle as a Facebook board member. [...]
Netflix was a large advertiser to Facebook, and plaintiffs allege Zuckerberg shuttered its promising Watch platform for the sake of the greater advertising business. Zuckerberg personally emailed the head of Facebook Watch in May of 2018, Fidji Simo, to tell her their budget was being slashed by $750 million, just two years after Watch's launch, according to court filings. The sudden pivot meant Facebook was now dismantling the streaming business it had spent the last two years growing. During this time period, Netflix increased its ad spend on Facebook to roughly $150 million a year and allegedly entered into agreements for increased data analytics. By early 2019, the ad spend increased to roughly $200 million a year. Hastings left Facebook's board later in 2019.
UPDATE: Meta (Again) Denies Netflix Read Facebook Users' Private Messenger Messages.
The filings detail Hastings' uncomfortably close relationship with Meta's upper management, including Zuckerberg and Sheryl Sandberg. During these years, Netflix was allegedly granted special access to Facebook users' private message inboxes, among other privileged analytics tools, in exchange for hundred-million-dollar advertising deals. This gave Facebook greater dominance in its all-important ad division, plaintiffs allege, so the company was fine to retreat from Netflix's streaming territory by shuttering Watch. In 2017, Facebook Watch began signing deals to populate its streaming service with original TV Shows from movie stars such as Bill Murray. A year later, the service attempted to license the popular '90s TV show Dawson's Creek. Facebook Watch had meaningful reach on the home screen of the social media platform, and an impressive budget as well. Facebook and Netflix appeared ready to butt heads in the streaming world, and the Netflix cofounder found himself in the middle as a Facebook board member. [...]
Netflix was a large advertiser to Facebook, and plaintiffs allege Zuckerberg shuttered its promising Watch platform for the sake of the greater advertising business. Zuckerberg personally emailed the head of Facebook Watch in May of 2018, Fidji Simo, to tell her their budget was being slashed by $750 million, just two years after Watch's launch, according to court filings. The sudden pivot meant Facebook was now dismantling the streaming business it had spent the last two years growing. During this time period, Netflix increased its ad spend on Facebook to roughly $150 million a year and allegedly entered into agreements for increased data analytics. By early 2019, the ad spend increased to roughly $200 million a year. Hastings left Facebook's board later in 2019.
UPDATE: Meta (Again) Denies Netflix Read Facebook Users' Private Messenger Messages.
Re: (Score:2, Interesting)
Re: Ah.... (Score:1)
Re: Ah.... (Score:2)
Netflix advertising dollars must have been huge! (Score:5, Insightful)
Or Zuckerberg is smart enough to know what a shitty businessman he is and that he can't compete with with real businesses. Streaming services are much more of a business than FB. Netflix gives you something in return for your money. FB does not.
Re:Netflix advertising dollars must have been huge (Score:4, Interesting)
Technically, what both give you is a way to spend your time and entertain yourself for a moment. They both exist to "waste your time", if you will.
A thought did cross my mind, though. With all these ways of entertaining yourself, video games, animation, movies, tiktok... These services are all competing for user's time. People can't play a pc video game while scrolling tiktok at the same time, they can't read a book while watching a movie, or watch tiktok videos while ALSO watching instagram reels.
But, interestingly, people can "watch" netflix while scrolling facebook. If anything, these two can work relatively well together to maximize attention drain. The little slow moments of a show or a movie can be used to scroll once or twice on facebook without losing much.
I would call it a symbiotic relationship, but it's more like these two are opportunistic parasites feeding on our dying attention spans.
Re:Netflix advertising dollars must have been huge (Score:5, Interesting)
Big enough to make abandoning FB Watch more profitable than implementing it.
Or Zuckerberg is smart enough to know what a shitty businessman he is and that he can't compete with with real businesses. Streaming services are much more of a business than FB. Netflix gives you something in return for your money. FB does not.
Reading the complaint more closely I don't think they're claiming that the Ad dollars is what FB was interested in (you don't kill a multi-billion dollar investment for $200M). Rather, Facebook wanted data for its ML. If you look at just my FB activity it doesn't tell you much other than the fact I occasionally scroll though the news feed. But if you correlate that with what shows I watch... well now that's a really valuable dataset if you want to show me targeted ads. Valuable enough to start your own free streaming service.
So what's alleged to have happened is that Facebook gave Netflix extra access to their data, and Netflix did the same in return. That's why Facebook defunded their own streaming service, Netflix was willing to give them the data they wanted.
Re: (Score:2)
You know I'm no expert (Score:3, Informative)
An expensive law suit will follow (Score:1)
Whether it can be proved is to be seen. But yes, let's hope so!
Re: You know I'm no expert (Score:1)
Re: (Score:2)
But that sounds like a massive antitrust violation...
Hard to see how. Two companies collaborated rather than competed. Companies decide to launch or not launch products all the time. Say you're building a shopping mall (yes, yes, pretend this is the 80's). Do you compete with McBurgers by starting your own chain or just rent them a storefront?
Here's the thing: launching a new streaming service has got to be ferociously expensive. It's a hotly contested market so your chances of success are slim. We're talking tens of billions in infrastructure investment and
Collusion? Anti-trust? (Score:2)
The filings detail Hastings' uncomfortably close relationship with Meta's upper management, including Zuckerberg and Sheryl Sandberg. During these years, Netflix was allegedly granted special access to Facebook users' private message inboxes, among other privileged analytics tools, in exchange for hundred-million-dollar advertising deals.
OK, so we all know it happens. But to see it just casually stated, that one company gave another company direct access to private message inboxes seems to be some form of anti-trust violation. I mean, these companies all claim that data is the number one asset they want to collect, and have made it obvious. Would one company in the business world give another company direct access to their main asset? If so? Wouldn't they be put under investigation for some form of anti-trust violation? It's not a direct investment. It's literally taking digital assets and handing out copies. The very thing the media companies all go into apoplectic fits over if the end-users do it with music, movies, books, or any other form of digital asset.
This whole thing is MASSIVE piles of WTF. I feel like if we lived in anything other than an oligarchy the government would currently be discussing which particular limbs of which particular company should be cut off over this. Instead, it'll just be a casual story somewhere that everyone shrugs over cause, "What ya gonna do? Business is business."