Source: Facebook refines Facebook Watch strategy by moving away from originals and investing in talk shows and licensing, ups budget from $1B in 2017 to $1.4B
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Context & Ripple Effects
Facebook's Watch bet has been walking back from its own ambition for two years. The platform committed up to $1B through 2018 for original video ($1B originals push), then by late 2018 had already shifted toward sports, news, and stars as funding for publisher-made shows dried up. By early 2019, Bloomberg's verdict was blunt: about $1B spent, no hit shows, and a tiny slice of overall video revenue (Watch as a would-be YouTube killer).
Today's report closes the loop: rather than doubling down on originals, Facebook is raising the Watch budget to $1.4B but steering it into talk shows and licensed programming — a return to the licensing-first approach it explored with TV producers back in 2016 (licensing talks with TV shows) before the originals experiment.
First-order effects
- Digital publishers and studios that built scripted originals for Watch lose their remaining buyer, since Facebook is explicitly moving away from originals — the same cohort whose funding already dried up in 2018.
- Talk-show producers and rights holders of licensable TV-style content become the direct beneficiaries of the enlarged $1.4B budget.
Second-order effects
- YouTube faces a rival that has stopped trying to out-original it and is instead buying proven formats and library content, shifting the contest to distribution scale and ad sales rather than exclusive programming.
- Media buyers get a more predictable, TV-like slate on Watch, which matters given Facebook's earlier move to court them with an ad revenue-split model for individual creators resembling YouTube's.
Third-order effects
- If the pattern holds, platform-funded original video becomes a closed chapter: big platforms retreat to licensing established content instead of bankrolling risky originals, collapsing the premium budgets that digital publishers counted on during the pivot-to-video era.
- The failure of a $1B+ originals strategy at Facebook's scale strengthens the case that video advertising consolidates around incumbents with entrenched viewing habits — consistent with Omdia's finding that Facebook, Instagram, YouTube, and TikTok capture over 90% of social ad revenue.
The trend: Social platforms' original-video spending is giving way to licensing and format acquisition, as even Facebook concedes it cannot buy its way past YouTube with exclusives.