Users are flocking to Facebook Watch (FB)

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A sizable portion of Facebook users are using Watch, the company’s dedicated video section for TV-like content, since the video section’s launch in August of last year, according to a Morgan Stanley survey per Variety.

Morgan Stanley surveyed 1,400 US consumers in December, and 40% of Facebook users indicated they view Watch videos on a weekly basis.

Morgan Stanley’s survey bodes well for Facebook’s ability to sustain ad revenue growth:

  • High Watch viewership allows Facebook to lure new TV advertisers. These advertisers look to allocate bigger budgets to digital as traditional TV viewership declines — traditional cable operators lost a collective 872,000 subscribers in Q3 2017 alone. Magna predicts that global TV ad spend will reach $183 billion in 2018, lower than global digital ad spend’s projected value of $237 billion.
  • Facebook can attract brands looking to reach young and engaged audiences.Twenty-four percent of Facebook’s users access Watch daily, and 40% of these users are between the ages of 16 and 34. This helps the social platform combat concerns that its user base skews older compared with other social platforms — users aged 45-54 account for 21% of total time spent on Facebook, more than any other age group on the platform.
  • Current users may be exposed to more Watch videos with Facebook’s News Feed tweaks. Morgan Stanley’s survey didn’t include data on average time spent viewing Facebook Watch, but Watch video engagement could increase as Facebook prioritizes longer serialized content in the News Feed. This can help offset declining video views caused by Facebook’s recently announced News Feed algorithm tweak, which de-prioritizes publisher content.  

But Watch has a long way to go to catch up with YouTube viewership. Seventy-eight percent of respondents indicated they used YouTube in the past year, while this figure was just 43% for Facebook Watch. That’s not surprising, as YouTube has been around since 2005 and claims over 1 billion daily video views. Nonetheless, the adoption figures of Watch indicate Facebook is achieving its goal of converting more of its users into “lean-back” video viewers, as opposed to users who passively consume short-form video in the News Feed. Facebook is poised to boost Watch viewership as it broadens its exclusive TV-like content library.

BI Intelligence, Business Insider’s premium research service, has put together a detailed report on social video that:

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