Mark Zuckerberg Details Facebook's "Video First" Strategy

Mark Zuckerberg getty - H 2016
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Video was a hot topic during the CEO's quarterly earnings call with investors.

Video is going to continue to be an area of focus for Facebook. 

"I see video as a megatrend," CEO Mark Zuckerberg told investors during its fourth quarter earnings Feb. 1. "That's why I'm going to keep putting video first across our family of apps." 

Facebook has been dabbling in video since 2014, placing a new emphasis on the format last year when it began to fund live video broadcasts from producing partners such as BuzzFeed and the New York Times. 

Now, the social network has said that it will pay video producers to create longer, higher quality scripted and unscripted projects. But Facebook executives clarified Wednesday that they see this effort as a way to "kickstart the ecosystem" as it builds up its video coffers. 

Zuckerberg also clarified what he's looking for on Wednesday by noting, "we're focusing more on shorter-form content to start." 

He added: "There's the type of content that people produce socially, there's promotional content that businesses and celebrities and folks will produce, but there's also a whole class of premium content that creators need to get paid a good amount to support the creation of." He says that's why Facebook is working to build up its video advertising business, so that it can share in revenue with those creators.

Zuckerberg also noted that the social network's new video tab could help make video consumption via the app more habitual and attract episodic content. But when asked specifically what type of content Facebook would want to see, executives were vague. "We're looking at a wide range of content," said CFO David Wehner

The Wall Street Journal is reporting that to further bolster those video efforts, the social network is developing an app for set-top boxes like the Apple TV. Such an app would not only make video a central component of Facebook's business, it would also present the company with a new platform for selling advertisements. It's a move that Twitter already made last fall with the launch of a live video app for streaming its partners' broadcasts of the presidential debates and red-carpet coverage.

When asked about Facebook's interest in platforms beyond mobile, Wehner said Facebook wants to be "on a variety of platforms but our main focus is obviously on mobile." 

That's because mobile continues to be a driver of revenue for Facebook, with mobile ad revenue making up about 84 percent of all advertising revenue during the fourth quarter. 

The social network reported total quarterly revenue of $8.8 billion, up 51 percent year-over-year. It had adjusted quarterly earnings of $1.41 per share. 

Wall Street was anticipating a drop in revenue growth. Analysts polled by Thomson Reuters expected Facebook to report fourth-quarter revenue gains of 46 percent to $8.5 billion, what would have been the lowest rate of growth in the last five quarters. They also were expecting adjusted earnings of $1.31 per share.

Facebook had warned that revenue growth would lessen as it runs out of room for new ads on the news feed. During its last earnings announcement in November, executives said that would begin in the middle of 2017. 

The company's revenue growth is slowing, albeit not by as much as analysts were expecting. That's why video will become key to the company's long-term growth. 

Meanwhile, Facebook continues to grow its user base. The company had 1.23 billion daily active users at the end of 2016 and 1.86 billion monthly active users. 

Facebook shares closed the day up about 2 percent to $133.23. The stock was trading up about 3 percent after hours.