The social media giant will invest directly in users, paying bonuses for reaching engagement targets.
Facebook plans to attract more creators by offering cash rewards and seed funding.
Social media giant will invest directly in users, paying bonuses for reaching engagement targets
Facebook plans to attract more creators by offering cash rewards and seed funding.
Facebook FB -1.27% said it will pay more than $1 billion to content creators on its social networks by 2022, reflecting the growing value the company and its competitors see in recorded videos, live streams and other types of posts their users make.
In announcing the initiative Wednesday, Facebook joined other social networks that last year made serious commitments to invest directly in the people responsible for engaging users. The billion-dollar total also reflects the bar set by commitments previously announced by Snap Inc. about Snapchat, Google YouTube and Bytedance Ltd. about TikTok.
Facebook said creators could receive payments for reaching certain milestones while using its products. The company also plans to provide seed funding to help creators cover the cost of producing content for their platforms. According to Facebook, the programs will launch by invitation only, without specifying details such as deadlines or qualifications needed to participate.
However, it remains to be seen whether these rates will foster long-term loyalty for creators. People can build audiences on a variety of platforms, and the incentives that are provided for their use change quickly.
In recent years, savvy content creators have become an important part of the global social media landscape, contributing to the popularity of platforms like Amazon.com Inc.’s TikTok and Twitch. On these Internet hubs, anyone can become a star overnight, and the companies behind them seek to attract the most popular creators to stand out from the competition.
The earning potential among creators-be they writers, musicians, dancers or video game streamers-has launched a race among platforms to embrace and support creative talent. In addition to established social media platforms, startups such as Patreon Inc, Alpha Exploration Co.’s Clubhouse and Baron App Inc.’s Cameo have gained popularity during the pandemic among artists, subject matter experts and celebrities.
Ron Josi, a JMP Securities analyst who specializes in Internet and digital media, believes these programs are companies’ responses to the success of TikTok, which continues to show high engagement rates. TikTok was the most downloaded and most profitable non-gaming app worldwide in the first half of this year, according to research firm Sensor Tower Inc.
“TikTok is literally taking its eyes off other places,” Mr. Josi said. “The more Facebook can offer its users the same type of content, that’s a good thing. … More content can only help.”
Facebook has a huge global reach: In March, it reported that an average of 2.72 billion people a day use one of its platforms, including Instagram.
The company is betting that monetary rewards will serve as a sweetener for those deciding which platforms to focus their energy on. The company recently launched new platforms such as Live Audio Rooms for group conversations and Bulletin for creating and distributing digital newsletters.
CEO Mark Zuckerberg said he wants the company’s platforms to be the best place for millions of creators to make money. “Our goal is to help as many creators as possible achieve sustainable, long-term success with our apps,” the company said in a statement.
Other companies have made similar bets. Last year, TikTok said its Creator Fund would invest more than $2 billion in content creators worldwide over the next three years.
YouTube in May announced a $100 million fund, to be distributed this year and next, for creators of unique 60-second videos, called shorts, “that delight the YouTube community.” A division of Alphabet Inc.-owned Google said the fund is in addition to the more than $30 billion it has already paid to creators, artists and media companies over the past three years.
Also in May, Snapchat said it paid out more than $130 million to creators who contributed to Spotlight, a user-generated content feature launched on the app last year.
The moves could help Facebook and other tech giants reduce government oversight of the huge impact they have on consumers’ lives, said Tom Forte, a consumer technology analyst at D.A. Davidson. By offering users the opportunity to make money, rather than just serving as a revenue stream for advertisers, they assume they are “playing offense, not defense,” he said.
