Facebook Plans to Expand Live-Stream Pay-Per-View Events

Social giant Facebook wants to transform its live online events into a pay-per-view opportunity for the sports leagues already streaming games on its platform. The company sees the possibility of smaller leagues and even high school sports teams using the model to make money on “virtual” attendance and plans to invest in the live-streaming events that collects money for a “virtual” ticket. The social platform’s plan is similar to the long-standing practice of media networks like HBO charging pay-per-view fees for boxing events.

CNBC reports Facebook director of sports media and league partnerships Rob Shaw said that, “I think pay-per-view is by no means on any verge of extinction.” “I think this is something that helps breathe new life into it,” he suggested. “People are willing to pay to experience a moment … [but] I don’t think people are willing to immediately start with a subscription.”

Facebook, which launched paid online events last August, reported that it is “available in 44 markets globally, including in the U.S.” With its 2.85 billion monthly active users and 1.8 billion daily active users, “Facebook has a built-in audience to make this feature work.”

To host an event, Facebook requires an integrity check and, once approved, will monitor the event to “to prevent explicit content.” The virtual event held by Challenge Miami, a professional triathlon event, drew over 17,000 people, 70 percent of  them from outside the U.S., who purchased tickets for $2.99 each.

Facebook director of production management Yoav Arnstein “that goes to show the ability of sports infusion — to go and extend the reach beyond the current locale of the event, which is tremendous.” Verzuz, “which pairs notable musical stars in a battle-style event on Instagram,” also held successful live-streaming events, and was purchased by Triller.

NP Digital chief marketing officer Neil Patel tested paid online events by offering a live-streaming product, targeting consumers by “sending half to a third-party site and others to Facebook.” He reported that, “paid online events generated 28 percent more revenue for content creators than third-party services … [and] the conversion rates are higher.” Another benefit is a replay feature for those who missed the live-streamed event.

Arnstein said that Facebook “needs to add more engagement features to differentiate paid online events from its free streaming products.” The company is “also testing a geofencing feature that can allow hosts to target specific regions.”

CNBC notes that although “broadcast media rights restrict top sports leagues such as the National Football League and National Basketball Association to live-streaming games on Facebook … locally their clubs will need to get creative as the regional sports network, or RSN, business model needs to combat cable cord-cutters.” RSN fees are “still crucial for a pro team’s annual revenue,” but geofencing could help clubs monetize content such as team practices.

Facebook doesn’t currently charge fees on tickets for paid events and “Apple and Google have put a pause on the cut they take from the events to give hosts a break during the pandemic,” Big Tech companies are expected to “eventually attach in-app charges and pass the cost to users.”

Arnstein said Facebook will “provide updates about fees in the coming weeks.”