Facebook Tests Selling Video Subscriptions in Watch

By Sahil Patel

Facebook Inc. said it would start testing the sale of subscriptions to video services that can be viewed inside its Watch video hub.

The test will include Dropout, a fledgling, advertisement-free service from IAC/InterActiveCorp's CollegeHumor; Discovery Communications' MotorTrend on Demand; BritBox, owned by BBC Studios and ITV; and Tastemade Plus.

For $4.99 a month, for example, Dropout subscribers will get access to the service's library of original content through Facebook, as well as the ability to participate in virtual watch parties where they can talk with other viewers.

Facebook also is introducing a new feature that catalogs all of the content from a participating video service to which a user can subscribe. The catalog will be accessible on Facebook Watch as well as through the service's own Facebook page. Users who subscribe through Facebook also will be able to access those services on their own apps on other platforms, including Apple TV, Amazon Fire TV and Roku.

Facebook is expected to take a cut of each subscription it generates for video partners, according to a person familiar with the arrangement. A Facebook spokeswoman declined to comment on the matter.

In December, technology news website Recode reported Facebook was in talks with major cable programmers including HBO, Showtime and Starz about selling subscriptions to their streaming services for viewing on Facebook. The Facebook spokeswoman declined to comment on the status of those talks, but said the company is optimistic about adding new services to the platform in the future.

Amazon.com Inc., Apple Inc., Roku Inc. and Walt Disney Co.'s Hulu already "resell" subscription streaming services to users. Amazon's Prime Video Channels accounted for 35% of HBO Now subscribers late last year, according to a research report by BMO Capital Markets.

Facebook introduced Watch two years ago to lure more video advertising with professionally produced shows such as Jada Pinkett Smith's "Red Table Talk" and MTV's reboot of "The Real World."

Watch is up against formidable competition, however. In June, Facebook said Watch had 720 million monthly users globally who spend at least one minute on Watch, up from 400 million in December. By comparison, YouTube said in May that it had 2 billion monthly users, up from 1.9 billion last summer.

The test is the latest step in Facebook's quest to establish a meaningful video business, and is the first time Facebook is trying to sell video subscriptions directly to users.

Write to Sahil Patel at sahil.patel@wsj.com

(END) Dow Jones Newswires

August 08, 2019 10:14 ET (14:14 GMT)

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