Opinions expressed in this piece are solely those of the author and do not represent the views of S&P Global Market Intelligence.
Immersive video including augmented reality and virtual reality are the hot products under development at Facebook Inc. at present.
I recently visited Facebook’s sprawling Willow Road campus in Menlo Park, Calif., during an exclusive tour for attendees of the National Association of Broadcasters Futures conference. We met with various Facebook managers including Ash Jhaveri, vice president of business development for Oculus VR Inc.; Brandon Silverman, CEO and founder of content discovery and social monitoring platform CrowdTangle Inc.; Nick Gruden, vice president of Facebook's Media Partnerships; and Jason White, manager of the U.S. News Partnerships Team. Facebook acquired VR startup Oculus in 2014 and content discovery and social monitoring platform CrowdTangle in 2016.
Here are some key takeaways from the visit:
* The business model for immersive video is evolving as platform partners are expanding and applications are developing. Facebook has been moving up the learning curve in the past three years on how to use immersive video in entertainment, newsrooms and the workplace. The economics will likely include traditional developer and host revenue splits of 70%/30% typical of app stores, plus royalties and a user subscription component in the mix.
* Video surged in 2014 as Facebook users began inserting and sharing video clips in chat and posts. Video was a natural evolution of photo posts and link sharing, which became a leading Facebook engagement trend in 2012.
* News emerged in 2016 as an important user-generated content category. In step, Facebook is aggressively responding to fake news — a relatively new and dark challenge for all social media providers — with new monitoring tools, filters and screening teams to stem the tide of erroneous, hateful and misleading content.
* Video engagement is accelerating in all directions with augmented reality and VR a near-term bridge between entertainment, news and productivity. Social media will see much more change during the next couple of years than has occurred during the past 10 years. A decade from now artificial intelligence will likely be the hottest trend in consumer and enterprise social media, but immersive video will still be a key component of all social engagement.
* VR users could top 1 billion on Facebook in the not-too-distant future. Facebook CEO and co-founder Mark Zuckerberg envisions a multitude of content-rich augmented reality and VR applications for entertainment and productivity. Consumer VR is only a couple of years old but already has a broad array of more than 2,000 applications available. Oculus creates applications and content for a variety of hardware platforms, including "360" videos for consumer and workplace environments.
* Facebook does not plan to evolve into a hardware-centric consumer tech company like Apple Inc. but will continue to support VR headset-maker Oculus as it develops new hardware and software tools and applications. The consumer cost of VR will come down in 2018 as Oculus rolls out Oculus Go, a $200 headset for entertainment and social engagement.
* Facebook Spaces is the nexus of social media and VR via a gateway to collaborative productivity and workplace teams. Perhaps unsurprisingly, Facebook's own business development teams hold virtual meetings using the Spaces app.
* CrowdTangle has 4,500 news partners including 1,100 local news platforms, which generate story leads based on conversations monitored in Facebook groups. CrowdTangle helps newsrooms discover news content, identify news followers and benchmark data generated by news followers and news events.
* Oculus supported productions have won three Emmy awards and have been nominated six times in 2016 and 2017. The awards include "The People's House" — a look inside the White House with Barack and Michelle Obama — for outstanding original interactive program; "Henry"— a short animated video; and "Follow My Lead" — about the National Basketball Association’s final championship series.
* Highly publicized Oculus applications include virtual vacations to medical educational videos on how the heart functions.