Apple’s morning show drama adds Steve Carell to the cast

Apple’s still-untitled morning show drama already has some serious star power, with Jennifer Aniston and Reese Witherspoon as its leads. Now it’s adding Steve Carell to the cast.

This will be Carell’s first regular role on a TV show since his seven seasons starring in the U.S. version of “The Office.” He’ll be playing Mitch Kessler, a morning show anchor who’s struggling to stay relevant. And no, it’s not the first time he’s playing a news anchor.

The series will focus on the world of morning TV, drawing material from reporter Brian Stelter’s book “Top of the Morning.” (Stelter serves as a consultant.) It was one of the first shows that Apple announced as part of its push into original streaming content, with two seasons of 10 episodes each already ordered. The company plans to start production in Los Angeles next week.

Aniston and Witherspoon (who’s working on more than one show with Apple) are both serving as executive producers, as is director Mimi Leder (who directed many of the best episodes of “The Leftovers”) and showrunner Kerry Ehrin (who previously co-created “Bates Motel”).

In other Apple streaming news, regular TechCrunch readers may be aware that I am extremely excited about the upcoming adaptation of Isaac Asimov’s “Foundation” novels. Well I’m even more excited with today’s announcement from comics writer and fantasy novelist Saladin Ahmed that he’s joining the show.

Still unclear: What Apple’s streaming service will be called, and what, if anything, it will cost viewers.

Guillermo del Toro is making a stop-motion Pinocchio movie for Netflix

Guillermo del Toro, the Academy Award-winning director of “The Shape of Water” (not to mention “Hellboy,” “Pan’s Labyrinth” and “Pacific Rim”) is making a new version of “Pinocchio” for Netflix.

I’d thought that after del Toro’s awards victory earlier this year he might finally make his long-thwarted adaptation “At the Mountains of Madness.” And while I’m not giving up hope that I’ll see a del Toro-helmed version of the classic H.P. Lovecraft horror story one day, it seems that he’s going in a different direction for now.

The official announcement from Netflix describes this as del Toro’s “lifelong passion project,” and says that it will be both a stop-motion animated film and a musical.

“No art form has influenced my life and my work more than animation and no single character in history has had as deep of a personal connection to me as Pinocchio,” del Toro said in a statement. “In our story, Pinocchio is an innocent soul with an uncaring father who gets lost in a world he cannot comprehend. He embarks on an extraordinary journey that leaves him with a deep understanding of his father and the real world. I’ve wanted to make this movie for as long as I can remember.”

This isn’t the director’s first project for Netflix — he previously created the animated series “Trollhunters,” and he has another series in the works for the streaming service, “Guillermo del Toro Presents 10 After Midnight.” Netflix says that in addition to directing the film with Mark Gustafson (“The Fantastic Mr. Fox”), he will co-write and co-produce it. The Jim Henson Company (which is also making a “Dark Crystal” prequel series for Netflix) and ShadowMachine are producing as well.

Netflix also announced today that it’s raising an additional $2 billion in debt to fund its original content plans. It says production on “Pinocchio” will begin this fall.

YouTube CEO says EU’s new copyright legislation threatens jobs, smaller creators

YouTube CEO Susan Wojcicki published her quarterly letter to creators today, which included very strong language regarding the EU’s controversial copyright reform directive. Specifically, her letter focused on Article 13, the so-called “meme ban” that states that any site with a large amount of user-generated content – like Facebook or YouTube, for example – will be responsible for taking down content that infringes on copyright. Wojcicki says the way this legislation is written could “shut down the ability” of millions of people to upload to YouTube.

The legislation she’s referring to is Article 13 of the European Union Directive on Copyright in the Digital Single Market, which the EU Parliament just recently voted to back. The Directive contains several parts, including another concerning “link tax,” which gives publishers the right to ask for paid licenses when online platforms share their articles and stories.

But YouTube is most concerned with Article 13, which impacts sites with user-generated content. In order to comply with the law, sites like YouTube would have to automatically scan and filter user uploads to ensure they aren’t in violation of copyright.

But today, users often express themselves by sampling, remixing, and creating content using music, pictures and videos that would otherwise be considered copyrighted material. However, even though memes and parodies are protected by previous laws (in some countries), these upload filters wouldn’t be able to tell the difference between a copyright violation and a meme – and they’d block content that should be allowed. This is how Article 13 became to be known as the “meme ban.”

However, the language in legislation isn’t clear on how enforcement should take place – it doesn’t say, for example, that sites have to use upload filters. Others believe that YouTube’s existing Content ID system, which scans videos after upload, would be sufficient.

YouTube, for its part, seems to be believe that Article 13 will require more than the existing Content ID system to be compliant.

Writes Wojcicki, “Article 13 as written threatens to shut down the ability of millions of people — from creators like you to everyday users — to upload content to platforms like YouTube. It threatens to block users in the EU from viewing content that is already live on the channels of creators everywhere. This includes YouTube’s incredible video library of educational content, such as language classes, physics tutorials and other how-to’s,” she says.

The CEO also says Article 13 will threaten “thousands of jobs” – meaning those of EU-based content creators, businesses, and artists.

And she warns that YouTube may have to take down content from smaller, original video creators, as it would be liable for that content, saying:

The proposal could force platforms, like YouTube, to allow only content from a small number of large companies. It would be too risky for platforms to host content from smaller original content creators, because the platforms would now be directly liable for that content. We realize the importance of all rights holders being fairly compensated, which is why we built Content ID, and a platform to pay out all types of content owners. But the unintended consequences of article 13 will put this ecosystem at risk.

The company wants to weigh in on how the legislation is worded to protect its interests, and those of the larger creator community. Wojcicki said YouTube is committed to working with the industry to find a better way respect the rights of copyright holders, before the language in the EU legislation is finalized by year-end.

 

Other changes include expansion of memberships, premieres

While YouTube’s comments on Article 13 were the key part of today’s letter, Wojcicki also updated the community on its priorities for 2018.

This included an update on its plans to better communicate with creators, which it says it accomplished by increasing the number of product updates and “heads up” messages regarding changes to YouTube, including smaller tests or experiments, on its @TeamYouTube handle and the Creator Insider channel, in addition to its launch of YouTube Studio, where creators can read all the news and product updates.

The company also said that its new “self certification” video upload flow, where creators self-describe the content in their videos for advertisers, will roll out more broadly in 2019.

Newly launched channel memberships are also expanding their rollout, with the threshold now being lowered from 100,000 to 50,000 subscribers. Meanwhile, the new Premieres feature is now publicly available to all creators.

Other updates focused on what YouTube is doing across education, news and journalism, YouTube Giving charity work, gaming, and more. The full letter is on YouTube’s blog here.

PlayStation Vue is first US pay TV provider to integrate with Apple’s TV app

Sony’s live TV streaming service, PlayStation Vue, announced this week it has become the first U.S. pay TV provider to integrate with Apple’s TV app. Until now, Apple’s TV app has featured content from both free and paid on-demand streaming apps like Hulu, Prime Video, HBO NOW, PBS Kids, The CW and others, along with those that require you log in with your pay TV credentials, like ABC, AMC, USA, SYFY, Showtime Anytime and many more.

With the new PlayStation Vue integration, subscribers to Sony’s pay TV service will be able to access all of Vue’s on-demand content across its nationally available channels in the Apple TV app. Live sports, including both national and regional sports networks, will be supported, too, the company says.

Explains Sony, users will be able to search and browse the PS Vue catalog in the TV app, while also taking advantage of TV app features like “Watch Now” and “Up Next” to organize their shows, movies and sports. When you find content you want to watch, it will open the stream right in the PS Vue app.

This integration will matter more to those who already subscribe to at least a couple of other streaming services in addition to PS Vue, as the TV app is designed to aggregate content and recommendations from across services in a single place. It works on iOS devices, including iPhone and iPad, and on Apple TV.

PS Vue is one of now several pay TV streaming services, and a rival to YouTube TV, Hulu with Live TV, Sling TV, AT&T’s DirecTV Now and WatchTV. But it’s been lagging behind on subscribers.

Dish’s Sling TV and DirecTV Now lead the space, thanks to Sling’s early mover advantage and DirecTV Now’s distribution through AT&T’s wireless business. The former had 2.3 million subscribers as of June, while AT&T said DirecTV Now had 1.8 million, as of its earnings report in July. Hulu with Live TV cracked a million subscribers in September, ahead of YouTube TV.

Sony’s PlayStation Vue, meanwhile is just somewhere over half a million. It may have struggled to grow due to its branding, which seems to imply it’s only for PlayStation owners. (It’s not).

Perhaps the company is hoping the closer ties with Apple’s TV app will give its service more visibility.

The integration also arrives just ahead the launch of Apple’s own original content, which could bring more people back to the Apple TV app, further boosting PS Vue’s visibility.

While PS Vue is the first U.S.-based pay TV provider to offer this sort of integration with the TV app, it’s not the first worldwide. In France, for example, Canal+ “myCanal” and Molotov have offered this same sort of integration for some time.

Facebook launches ‘Hunt for False News’ debunk blog as fakery drops 50%

Facebook hopes detailing concrete examples of fake news it’s caught — or missed — could improve news literacy, or at least prove it’s attacking the misinformation problem. Today Facebook launched “The Hunt for False News,” in which it examines viral B.S., relays the decisions of its third-party fact-checkers and explains how the story was tracked down. The first edition reveals cases where false captions were put on old videos, people were wrongfully identified as perpetrators of crimes or real facts were massively exaggerated.

The blog’s launch comes after three recent studies showed the volume of misinformation on Facebook has dropped by half since the 2016 election, while Twitter’s volume hasn’t declined as drastically. Unfortunately, the remaining 50 percent still threatens elections, civil discourse, dissident safety and political unity across the globe.

In one of The Hunt’s first examples, it debunks that a man who posed for a photo with one of Brazil’s senators had stabbed the presidential candidate. Facebook explains that its machine learning models identified the photo, it was proven false by Brazilian fact-checker Aos Fatos, and Facebook now automatically detects and demotes uploads of the image. In a case where it missed the mark, a false story touting NASA would pay you $100,000 to study you staying in bed for 60 days “racked up millions of views on Facebook” before fact-checkers found NASA had paid out $10,000 to $17,000 in limited instances for studies in the past.

While the educational “Hunt” series is useful, it merely cherry-picks random false news stories from over a wide time period. What’s more urgent, and would be more useful, would be for Facebook to apply this method to currently circulating misinformation about the most important news stories. The New York Times’ Kevin Roose recently began using Facebook’s CrowdTangle tool to highlight the top 10 recent stories by engagement about topics like the Brett Kavanaugh hearings.

If Facebook wanted to be more transparent about its successes and failures around fake news, it’d publish lists of the false stories with the highest circulation each month and then apply the Hunt’s format explaining how they were debunked. This could help dispel myths in society’s understanding that may be propagated by the mere abundance of fake news headlines, even if users don’t click through to read them.

The red line represents the decline of Facebook engagement with “unreliable or dubious” sites

But at least all of Facebook’s efforts around information security — including doubling its security staff from 10,000 to 20,000 workers, fact checks and using News Feed algorithm changes to demote suspicious content — are paying off:

  • A Stanford and NYU study found that Facebook likes, comments, shares and reactions to links to 570 fake news sites dropped by more than half since the 2016 election, while engagements through Twitter continued to rise, “with the ratio of Facebook engagements to Twitter shares falling by approximately 60 percent.”
  • A University of Michigan study coined the metric “Iffy Quotient” to assess the how much content from certain fake news sites was distributed on Facebook and Twitter. When engagement was factored in, it found Facebook’s levels had dropped to nearly 2016 volume; that’s now 50 percent less than Twitter.
  • French newspaper Le Monde looked at engagement with 630 French websites across Facebook, Twitter, Pinterest and Reddit. Facebook engagement with sites dubbed “unreliable or dubious” has dropped by half since 2015.

Of course, given Twitter’s seeming paralysis on addressing misinformation and trolling, they’re not a great benchmark for Facebook to judge by. While it’s useful that Facebook is outlining ways to spot fake news, the public will have to internalize these strategies for society to make progress. That may be difficult when the truth has become incompatible with many peoples’ and politicians’ staunchly held beliefs.

In the past, Facebook has surfaced fake news-spotting tips atop the News Feed and bought full-page newspaper ads trying to disseminate them. The Hunt for Fake News would surely benefit from being embedded where the social network’s users look everyday instead of buried in its corporate blog.

Why so many tech companies are creating shows

Editor’s note: Jay Acunzo is the author of the new book Break the Wheel, which explores how the world’s best creators break from conventional thinking to think for themselves. He’s a former digital media strategist at Google, head of content at HubSpot, and VP of brand at the seed VC, NextView.

The deep tones of synth music begins to play. A crackling sound emerges, as if from static electricity, followed by a single strum from an electric guitar that shatters the silence. A man’s voice booms.

“I really didn’t get fascinated with design until I learned what it was and what it could actually do.”

These are the opening moments of InVision’s “Design Disruptors,” a now-famous film within the design community. This hour-long video features some of the biggest and brightest names in software design today, hailing from companies like Google, Lyft, Netflix, Dropbox, and more. The film launched in the summer of 2016, and although it was never aired online (the company debuted the film in 1,500 offline screenings worldwide), “Design Disruptors” helped InVision generate more than 70,000 leads and double its user base in a single year, according to sources within the firm.

While this may seem like an outlier project, it’s become part of a larger marketing trend we’re seeing proliferate around the tech world today: marketers creating films and shows. Why?

“Optimistically, I’d hope it’s because marketers are realizing that impressions and pageviews are BS metrics, and it’s a lot more valuable to get a smaller group of consumers hooked on a show that they’ll watch for a really long time,” said Joe Lazauskas, executive editor and head of content strategy at the marketing tech firm Contently. A journalist by background, Lazauskas now consults clients like Microsoft, IBM, and Autodesk for Contently, and while he clings to his optimism, he knows there’s a downside to any trend. “Pessimistically, I’d say that it’s because marketers still fall in love with big vanity projects without much thought to the return on investment.”

So what’s causing this trend, anyway?

Ultimately, Lazauskas concludes that the rise in branded shows is a combination of both his optimistic and pessimistic views. On the one hand, films and series are indeed strategic for some companies, enabling them to reap certain rewards that disparate pieces of content can’t provide. On the other hand, plenty of companies continue to glom onto the trend because, well, “it’s a thing.” Those in the former group, however, have identified a fundamental shift currently affecting how companies go to market. Most of us talk about the industry’s reaction to that shift: things like content marketing, influencer marketing, and similar experience-based approaches. The shift itself, though, is far more revealing. You see, the marketing mandate has changed. The goal is no longer to acquire attention. The goal is to hold it.

It used to be sufficient for marketers to describe the value of their products in a few disconnected interruptions. Marketers would leap out in front of the content a consumer actually wanted to consume in order to grab just a few seconds of their attention and deliver the right message, with the right promotion, at the right time. Of course, we all know what happened to that old marketing playbook: (insert mushroom cloud GIF). Along came the internet. Buyers of both B2C and B2B products now face seemingly infinite choice, from content to competing products, all accessible on multiple screens, whenever and wherever they want it. Additionally, technologies whose sole purpose is to block advertising signal a larger trend: As consumers, we don’t want to be interrupted. We control what we consume because we have all the choice, and we only choose experiences that create value in our lives, like content–not advertisements, which are messages that merely describe value. (I’m painting with broad strokes, but we’re all part of the technorati after all.)

If you’re a marketer today, and you’re stuck in acquisition mode, it’s like digging a hole in dry sand. Nothing you do sticks. The very best in our world are winning on customer experience, not brute-forcing their way into customers’ lives. We need to embrace the new marketing mandate: The job isn’t to acquire attention. The job is to hold it.

“If you’re willing to make the investment in some serialized, engaging content, rather than a bunch of disconnected pieces, you can start thinking in terms of hours spent with your company as opposed to ideas like impressions,” said Dan Mills, creative director at video software company Wistia. This fall, the company announced a new documentary series called “One, Ten, One Hundred,” a partnership with video agency Sandwich, which boasts clients like Facebook, Slack, Uber, and Square. The series explores the effects of constraints on creativity when creating videos.

Said Wistia’s cofounder and CEO, Chris Savage, “What’s interesting about a more substantial project like this is that instead of just moving on to the next piece of content to push out the door, we have the time and space to really invest in exploring all of the different angles and nuances of this complex topic.” First, the company asked Sandwich to create three videos to promote the same Wistia product (a Chrome extension called Soapbox): One ad for $1,000, one for $10,000, and one for $100,000 (hence the name “One, Ten, One Hundred”). Those videos launched in mid-September. In October, Wistia will release a four-part documentary series going behind-the-scenes of the entire process to examine exactly how changes in budget alter the quality of the videos. They believe that budget is a major reason why more marketing teams don’t prioritize video (and thus, buy Wistia). More specifically, they believe this is a perception problem and that teams don’t really need more money to create better videos in most cases. But it’s a messy subject.

“A blog post or a two minute video just wasn’t going to cut it,” Savage said. “We wanted to create something that was deeper and lasting. The most valuable thing that we learned through this process, and what we explore in “One, Ten, One Hundred,” is the complex relationship between money and creativity.”

InVision’s CEO and cofounder, Clark Valberg, seems to agree that holding significant audience attention means focusing on depth, not breadth. Like Wistia, InVision used its documentary, “Design Disruptors,” as well as its newer film with IBM called “The Loop,” to illuminate a large problem facing designers in their work and to rally the community around their brand to solve it. For Wistia, their customers struggle with budget. At InVision, they realized that product designers wanted a better sense of identity as a profession, as well as a seat at the proverbial table.

“We went out and talked to our best customers,” he said. “They had a lot more to tell us than just what they were doing with our products. There was a movement [in the field of product design], and they all felt it. They all understood their role within the company and their company’s role in the formation of this new market called digital product design. It was evolving here and now, and they had a lot to say about it.”

Wistia and InVision are not alone in creating shows and trying to spark movements in doing so. Other companies creating video series include Fuze, which will partner with CBS to create a new series about tech later this year, and LinkedIn’s sales and marketing solutions team, which debuted “B2B Dinner for Five” late last year. In audio, dozens of brands are breaking from the conventional wisdom of what a podcast has to sound like (namely, Q&A with experts) to create documentary series instead. These include Zendesk’s “Repeat Customer“ (created with the agency Pacific Content), Adobe’s upcoming “Wireframe” (Gimlet Media’s branded content studio Gimlet Creative), and “Exceptions,” a series exploring why high-growth SaaS companies are betting so heavily on brand marketing (which, full disclosure, I host and produce for my client Drift).

These companies all seek benefits from their shows that the usual marketing campaign or “piece” of content doesn’t offer. By holding attention for hours on end, shows develop a level of intimacy and trust similar to a one-on-one meeting that scales far better. Shows provide endless amounts of marketing efficiencies, too, allowing marketing teams to mine each episode for excerpts, lessons learned, and new ideas, all of which can fuel company blogs, newsletters, and social media profiles. At some point soon, I expect to see a brand-sponsored book with material pulled exclusively from their company’s show, there’s that much source material bottled up in episodes. Lastly, shows create customers through both word-of-mouth and thriving subscriber lists. After all, it’s far more powerful to say to a visitor, “Get the next episode,” than, “Subscribe for alerts” or “more of our content.”

According to the Edelman Trust Barometer, an annual report measuring consumer trust in big institutions like government and business, trust in companies continues to fall. To get any individual, let alone an entire audience, to spend 10, 30, or even 60 minutes with your company each week is more powerful than ever. But that’s the benefit these companies seek.

What would cause this trend to stick?

It’s hard to ignore Lazauskas’s pessimism about brands adopting this approach. After all, most companies barely know how to market a single blog post well, let alone build and promote an entire series. For example, in many B2B niches, competing shows feel like copycat programs. They’re all effectively “Talking Topics With Experts!” (If everyone claims to have the smartest show in a niche, does anyone?) Additionally, many shows lapse after a season or two, even after a public victory lap over their first few episodes. Slack’s “Work in Progress” hasn’t aired an episode since October 2017, despite being widely loved and even syndicated to satellite radio. But while Lazauskas hints at the potential negatives, Wistia’s Savage sees it differently. His company is investing heavily in serialized content, but he believes marketers need to shift how they track results to justify doing so.

“It starts with qualitative results: Are people talking about it, are they engaging and spending time with the content? Over a longer period of time, we expect to see that content like [“One, Ten, One Hundred”] brought in totally new and different audience that helps expand our customer base.” If most marketing focuses on reach with a broad group of people, then shows are all about resonance with the right people.

Additionally, as Clark Valberg of InVision told me, it has to be a “portfolio approach.” Brands shouldn’t aim to be purely Netflix any more than they should act exclusively like Don Draper in “Mad Men.” Some things are directly measurable, some things are not. Some marketing looks like a piece of content, some like a series. Finding the right mix for your business is what matters most.

Shows have long been a vehicle for holding attention, and marketers are finally catching up to what media companies realized long ago. Call it the Curse of Conventional Wisdom. As tech companies invent the future, marketers at those very same companies need to constantly question older norms and even the most tried-and-true best practice in order to keep up. After all, we may be at the start of something positive for companies and consumers alike—that is, if you’re optimistic.

“We definitely think this is the beginning of a trend,” said Savage. “It’s clear that companies are making investments in engaging their audiences with things like podcasts. We see video series content and storytelling as the next logical step for companies to connect at a deeper level.”

I’ve been a content marketer for a decade now, which makes me a grizzled vet in a relatively new career path. (In marketing, “grizzled vet” is code for “jaded as hell.”) But for once, I’m bullish on a trend. It’s not because the hype won’t fade. It will. But, refreshingly, this is an approach to marketing that can’t be gamed. When the goal is to hold attention, not merely acquire it, there’s no faking it. You have to earn that level of attention. Trust, influence, and hours of someone’s time aren’t things you can purchase or hack. Eventually, this wave will go out, and all who will be left will be companies like InVision and Wistia who truly dug into the ground, with real foundations of creativity and customer-focus. Those merely riding the wave will be washed away. When it comes to holding long periods of our attention, the hucksters and system-gamers have no power. Because fool me once, shame on you. Fool me twice—can’t get fooled again.

UK and US pull out of Saudi event over alleged murder of Jamal Khashoggi

UK trade secretary, Liam Fox, and US Treasury secretary, Steven Mnuchin, join others in boycotting economic forum in Riyadh

Liam Fox, the UK trade secretary, and the US Treasury secretary, Steven Mnuchin, joined key European partners in pulling out of a major economic forum in Saudi Arabia nicknamed Davos in the desert, in response to the alleged murder of the journalist Jamal Khashoggi.

Reports of Khashoggi’s gruesome murder at the hands of a gang of 15 men with links to the Saudi royal court have already led to many western media firms and bankers pulling out, and the political lead from Fox and Mnuchin is likely to accelerate the boycott of the Future Investment Initiative (FII) conference in Riyadh next week.

Related: As Trump cozies up to Saudi Arabia, the rule of law collapses further | Richard Wolffe

Related: Search for Khashoggi’s remains focuses on consul general’s house

Related: Mohammed bin Salman never was a reformer. This has proved it | Dilip Hiro

Continue reading…

Why IGTV should go premium

It’s been four months since Facebook launched IGTV, with the goal of creating a destination for longer-form Instagram videos. Is it shaping up to be a high-profile flop, or could this be the company’s next multi-billion-dollar business?

IGTV, which features videos up to 60 minutes versus Instagram’s normal 60-second limit, hasn’t made much of a splash yet. Since there are no ads yet, it hasn’t made a dollar, either. But, it offers Facebook the opportunity to dominate a new category of premium video, and to develop a subscription business that better aligns with high-quality content.

Facebook worked with numerous media brands and celebrities to shoot high-quality, vertical videos for IGTV’s launch on June 20, as both a dedicated app and a section within the main Instagram app. But IGTV has been quiet since. I’ve heard repeatedly in conversations with media executives that almost no one is creating content specifically for IGTV and that the audience on IGTV remains small relative to the distribution of videos on Snapchat or Facebook. Most videos on it are repurposed from a brand’s or influencer’s Snapchat account (at best) or YouTube channel (more common). Digiday heard the same feedback.

Instagram announced IGTV on June 20 as a way for users to post videos up to 1 hour long in a dedicated section of the app (and separate app)

Facebook’s goal should be to make IGTV a major property in its own right, distinct from the Instagram feed. To do that, the company should follow the concept embodied in the “IGTV” name and re-envision what television shows native to the format of an Instagram user would look like.

Its team should leverage the playbook of top TV streaming services like Netflix and Hulu in developing original series with top talent in Hollywood to anchor their own subscription service, but in it a new format of shows produced specifically for the vertically oriented, distraction-filled screen of a smartphone.

Mobile video is going premium

Of the 6+ hours per day that Americans spend on digital media, the majority on that is now on their phone (most of it on social and entertainment activities) and video viewing has grown with it. In addition to the decline in linear television viewing and rise of “over-the-top” streaming services like Netflix and Hulu, we’ve seen the creation of a whole new category of video: mobile native video.

Starting at its most basic iteration with everyday users’ recordings for Snapchat Stories, Instagram Stories and YouTube vlogs, mobile video is a very different viewing environment with a lot more competition for attention. Mobile video is watched as people are going about their day. They might commit a few minutes at a time, but not hour-long blocks, and there are distracting text messages and push notifications overlaid on the screen as they watch.

“Stories” on the major social apps have advanced vertically oriented, mobile native videos as their own content format

When I spoke recently with Jesús Chavez, CEO of the mobile-focused production company Vertical Networks in Los Angeles, he emphasized that successful episodic videos on mobile aren’t just normal TV clips with changes to the “packaging” (cropped for vertical, thumbnails selected to get clicks, etc.). The way episodes are written and shot has to be completely different to succeed. Chavez put it in terms of the higher “density” of mobile-native videos: packing more activity into a short time window, with faster dialogue, fewer setup shots, split screens and other tactics.

With the growing amount of time people spend watching videos on their social apps each day — and the flood of subpar videos chasing view counts — it makes sense that they would desire a premium content option. We have seen this scenario before as ad-dependent radio gave rise to subscription satellite radio like Sirius XM and ad-dependent network TV gave rise to pay-TV channels like HBO. What that looks like in this context is a trusted service with the same high bar for riveting storytelling of popular films and TV series — and often featuring famous talent from those — but native to the vertical, smartphone environment.

If IGTV pursues this path, it would compete most directly with Quibi, the new venture that Jeffrey Katzenberg and Meg Whitman are raising $2 billion to launch (and was temporarily called NewTV until their announcement at Vanity Fair’s New Establishment Summit last Wednesday). They are developing a big library of exclusive shows by iconic directors like Guillermo del Toro and Jason Blum crafted specifically for smartphones through their upcoming subscription-based app.

Quibi’s funding is coming from the world’s largest studios (Disney, Fox, Sony, Lionsgate, MGM, NBCU, Viacom, Alibaba, etc.) whose executives see substantial enough opportunity in such a platform — which they could then produce content for — to write nine-figure checks.

TechCrunch’s Josh Constine argued last year Snapchat should go in a similar “HBO of mobile” direction as well, albeit ad-supported rather than a subscription model. The company indeed seems to be stepping further in this direction with last week’s announcement of Snapchat Originals, although it has announced and then canceled original content plans before.

Snapchat announced its Snap Originals last week

Facebook is the best positioned to win

Facebook is the best positioned to seize this opportunity, and IGTV is the vehicle for doing so. Without even considering integrations with the Facebook, Messenger or WhatsApp apps, Facebook is starting with a base of more than 1 billion monthly active users on Instagram alone. That’s an enormous audience to expose these original shows to, and an audience who don’t need to create or sign into a separate account to explore what’s playing on IGTV. Broader distribution is also a selling point for creative talent: They want their shows to be seen by large audiences.

The user data that makes Facebook rivaled only by Google in targeted advertising would give IGTV’s recommendation algorithms a distinct advantage in pushing users to the IGTV shows most relevant to their interests and most popular among their friends.

The social nature of Instagram is an advantage in driving awareness and engagement around IGTV shows: Instagram users could see when someone they follow watches or “likes” a show (pending their privacy settings). An obvious feature would be to allow users to discuss or review a show by sharing it to their main Instagram feed with a comment; their followers would see a clip or trailer, then be able to click-through to the full show in IGTV with one tap.

Developing and acquiring a library of must-see, high-quality original productions is massively capital-intensive — just ask Netflix about the $13 billion it’s spending this year. Targeting premium-quality mobile video will be no different. That’s why Katzenberg and Whitman are raising a $2 billion war chest for Quibi and budgeting production costs of $100,000-150,000 per minute on par with top TV shows. Facebook has $42 billion in cash and equivalents on its balance sheet. It can easily outspend Quibi and Snap in financing and marketing original shows by a mix of newcomers and Hollywood icons.

Snap can’t afford (financially) to compete head-on and doesn’t have the same scale of distribution. It is at 188 million daily active users and no longer growing rapidly (up 8 percent over the last year, but DAUs actually shrunk by 3 million last quarter). Snapchat is also a much more private interface: it doesn’t enable users to see each others’ activity like Facebook, Instagram, LinkedIn, YouTube, Spotify and others do to encourage content discovery. Snap is more likely to create a hub for ad-supported mobile-first shows for teens and early-twentysomethings rather than rival Quibi or IGTV in creating a more broadly popular Netflix or Hulu of mobile-native shows.

It’s time to go freemium

Investing substantial capital upfront is especially necessary for a company launching a subscription tier: consumers must see enough compelling content behind the paywall from the start, and enough new content regularly added, to find an ongoing subscription worthwhile.

There is currently no monetization of IGTV. It is sitting in experimentation mode as Facebook watches how people use it. If any company can drive enough ad revenue solely from short commercials to still profit on high-cost, high-quality episodic shows on mobile, it’s Facebook. But a freemium subscription model makes more sense for IGTV. From a financial standpoint, building IGTV into its own profitable P&L while making substantial content investments likely demands more revenue than ads alone will generate.

Of equal importance is incentive alignment. Subscriptions are defined by “time well spent” rather time spent and clicks made: quality over quantity. This is the environment in which premium content of other formats has thrived too; Sirius XM as the breakout on radio, HBO on linear TV, Netflix in OTT originals. The type of content IGTV will incentivize, and the creative talent they’ll attract, will be much higher quality when the incentives are to create must-see shows that drive new subscribers than when the incentives are to create videos that optimize for views.

Could there be a “Netflix for mobile native video” with shows shot in vertical format specifically for viewing on smartphone?

The optimization for views (to drive ad revenue) have been the model that media companies creating content for Facebook have operated on for the last decade. The toxicity of this has been a top news story over the last year with Facebook acknowledging many of the issues with clickbait and sensationalism and vowing changes.

Over the years, Facebook has dragged media companies up and down with changes to its newsfeed algorithm that forced them to make dramatic changes to their content strategies (often with layoffs and restructuring). It has burned bridges with media companies in the process; especially after last January, how to reduce dependence on Facebook platforms has become a common discussion point among digital content executives. If Facebook wants to get top producers, directors and production companies investing their time and resources in developing a new format of high-quality video series for IGTV, it needs an incentives-aligned business model they can trust to stay consistent.

Imagine a free, ad-supported tier for videos by influencers and media partners (plus select “IGTV Originals”) to draw in Instagram users, then a $3-8/month subscription tier for access to all IGTV Originals and an ad-free viewing experience. (By comparison, Quibi plans to charge a $5/month subscription with ads with the option of $8/month for its ad-free tier.)

Looking at the growth of Netflix in traditional TV streaming, a subscription-based business should be a welcome addition to Facebook’s portfolio of leading content-sharing platforms. This wouldn’t be its first expansion beyond ad revenue: the newest major division of Facebook, Oculus, generates revenue from hardware sales and a 30 percent cut of the revenue to VR apps in the Oculus app store (similar to Apple’s cut of iOS app revenue). Facebook is also testing a dating app which — based on the freemium business model Tinder, Bumble, Hinge, and other leading dating apps have proven to work — would be natural to add a subscription tier to.

Facebook is facing more public scrutiny (and government regulation) on data privacy and its ad targeting than ever before. Incorporating subscriptions and transaction fees as revenue streams benefits the company financially, creates a healthier alignment of incentives with users and eases the public criticism of how Facebook is using people’s data. Facebook is already testing subscriptions to Facebook Groups and has even explored offering a subscription alternative to advertising across its core social platforms. It is quite unlikely to do the latter, but developing revenue streams beyond ads is clearly something the company’s leadership is contemplating.

The path forward

IGTV needs to make product changes if it heads in this direction. Right now videos can’t link together to form a series (i.e. one show with multiple episodes) and discoverability is very weak. Beyond seeing recent videos by those you follow, videos that are trending and a selection of recommendations, you can only search for channels to follow (based on name). There’s no way to search for specific videos or shows, no way to browse channels or videos by topic and no way to see what people you follow are watching.

It would be a missed opportunity not to vie for this. The upside is enormous — owning the Netflix of a new content category — while the downside is fairly minimal for a company with such a large balance sheet.