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Facebook Inc (FB) Video Stats Smacked by SnapChat

Facebook Inc, Netflix Inc are still a buy despite market

Facebook Inc last week said it had doubled daily video views to 8 billion from 4 billion in April. Investors cheered the news and sent the stock zooming higher.

But a Financial Times report on Sunday has regrouped bears, who say the social network may not be able to sustain that video momentum for too long.

Facebook Inc, Netflix Inc are still a buy despite market

Tim Bradshaw, writing for FT, said that messaging app Snapchat is closing in on Facebook in the battle to grab eyeballs in the lucrative video segment. Citing unnamed sources, he said the number of videos viewed daily on Snapchat has tripled since May to 6 billion.

It’s interesting to note that Facebook Inc ’s figure includes both mobile and desktop views, while Snapchat’s audience is exclusively made up of smart phone viewers.

Snapchat added a number of new features over the past one year. And it seems those bets are paying off. In late October, it rolled out updates for both its iOS and Android apps. It also added a 3D Touch functionality for the newly launched iPhone 6s.

Video is Booming

Research firm, eMarketer, estimates a 42 per cent jump in U.S. digital video revenues this year to $7.5 billion. Similarly, Forrester Research forecasts U.S. ad spending on the medium to reach $12.6 billion by 2019.

Facebook Inc is gearing to grab a large chunk of that video pie. During last week’s earnings call, Mark Zuckerberg said 500 million people watched videos daily on its apps and site.

“Over the next few years, video is going to be some of the most engaging content online,” Zuckerberg added on Wednesday.

Facebook May be Losing Steam

But not all agree with Facebook’s rosy outlook. Ken Yeung of VentureBeat thinks the going may get tougher.

“Hitting the 6 billion mark is evidence of Snapchat’s continued growth. So could we expect Snapchat to be on par with Facebook by the end of 2015?” he said.

He goes on to add that Snapchat is turning into an appealing alternative for advertisers. “It’s catching the eye of brands and studios who are exploring the potential of original digital content that will resonate with the Snapchat audience.”

Bulls Disagree

The latest FT figures are impressive no doubt. But some say that comparing Snapchat’s video stats to that of other internet majors can be tricky, and often misleading.

Investment strategist, Dante D’Orazio, writing in The Verge, says a big question mark remains over how long a user has to watch a video for it to count as a “view.”

“For Facebook, that number is three seconds, while for Snapchat, it’s reported that just a few milliseconds will suffice.”

Shares of Facebook Inc closed Friday at $107.10.

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