Facebook's Live Video Policy Shift: A Blow to User Engagement and Advertising Revenue?

Facebook's recent announcement that it will now only store live videos for 30 days before deleting them has raised concerns about the impact on user engagement and advertising revenue. The social media giant, which has long been a hub for live broadcasts, is now aligning its storage policies with industry standards, but the move may have unintended consequences.

The Impact on User Engagement

Live videos have been a significant driver of user engagement on Facebook. In 2017, 20% of videos viewed on the platform were live broadcasts. By removing older live videos, Facebook may see a decrease in user engagement, as users may be less likely to revisit or share older content. This could lead to a decrease in the overall time users spend on the platform, potentially impacting ad viewership and revenue.

Advertising Revenue Implications

User engagement is directly linked to ad viewership on Facebook. If users engage less with the platform due to the absence of older live videos, there may be a decrease in ad viewership, which could impact Facebook's advertising revenue. Additionally, advertisers may be less inclined to invest in Facebook Live ads if they believe the content will only be available for a limited time, further impacting ad spend on the platform.

Potential Shift in User Behavior

With the removal of older live videos, users may shift their behavior and engage more with other types of content or platforms that offer longer-term storage of live videos, such as YouTube or Twitch. This could lead to a decrease in the overall time users spend on Facebook, further impacting ad viewership and revenue.

Facebook's Stock Value

Facebook's decision to limit the storage of live videos to 30 days may have an impact on the company's stock value, considering its recent focus on stability and consistent growth. A potential loss of user engagement and time spent on the platform, reduced user-generated content, and impact on advertisers and brands could negatively affect Facebook's stock value.

Conclusion

While Facebook's policy change may have some impact on user engagement, advertising revenue, and stock value, it's challenging to quantify the exact extent of that impact without more specific data and analysis. Facebook will need to monitor these effects and adjust its strategies accordingly to maintain user engagement and retention. Investors should keep an eye on Facebook's performance in the coming months to assess the true impact of this policy change on the company's financial health.