Making Money with Facebook

Facebook is like an incredible walled garden. And as the platform matures, development and design agencies have pushed it’s boundaries, resulting in mixed blessings for the platform. By readjusting it’s priorities, it has experienced the first dip in its user base. The adjustments, however, could potentially make Facebook stronger than ever, especially if it can convince third parties and companies it’s a true platform, instead of just another social network.

In July, the BBC launched the Dr Who streaming service. For a few Facebook credits, non-UK residents can watch a select set of Dr Who episodes for up to 72 hours. (This is just one example of how the garden is changing.)

When the Beeb launched their service, Twitter and Facebook exploded. Why? It’s the BBC. Naturally. everything they touch has to be investigated in minute detail, discussed on social networks and in the wider media here in the UK. It’s also a change of direction for the BBC, which is now relying on a 3rd party. Indeed, it opened a debate on should the BBC be in part paying a third party to put content in a closed garden?

Over the weekend of the launch, I had to stifle laughs. Friends were explaining how much it cost, how they wouldn’t make their money back, and most importantly, why the BBC would give 30% of money to Facebook!

You see, as the technical director and part of the team at Coding Futures, I’ve helped several major clients launch large Facebook applications. We had also been working on a way to take that knowledge to put it into our retail software, Your Members.

The Your Members WordPress membership plugin leans heavily on developments coming from our work with enterprise clients. Over the last few months, we have been building a feature-rich Facebook addon that allows you to create applications, protect content and pay for it with multiple gateways, including Facebook credits while in Facebook.

What’s more, the same software already has a streaming addon, which allows you to securely stream video from Amazon s3 via progressive download, or create an Amazon Cloudfront distribution and do real RTMP streaming.

Now, you would expect the Beeb to use it’s massive resources to hire a development team like Coding Futures to create something unique. They didn’t. In fact, they could have created the exact same thing for less than $200 using Your Members. Which, while great they have helped prove a concept, have they really pushed the boundaries?

Now, basically anyone could create their own pay-to-view Facebook video service. If you want to give it a go, here is a step-by-step tutorial for mimicking the BBC Facebook application in Your Members.

Of course, to use Facebook, you don’t have to pay them 30% of earnings. That’s only when using Facebook credits. You don’t need to take payments at all, and for the moment, only “games” are required to sell via credits, so other applications can use different payment methods.

Which leads to one of the more interesting concepts to developing within Facebook: the “likewall”. Just like a paywall, content is protected, but it only costs the user a single click to access content rather than a financial payment. For digital brands and ad agencies, the idea of a likewall is only just taking off mainstream, and it will be interesting to see how Facebook deals with incentivize likes. Currently, their terms and conditions on the subject are woolly at best.

So, the obvious question is where to next for the BBC? Is this first foray their last? Or, will we one day see iPlayer inside Facebook? (For non-UK peeps, this isn’t some strange apple device you haven’t heard of, but rather a BBC streaming service.) Probably not. If only because the people in the BBC working with Facebook are not the corporation we know here in the UK. They belong to BBC Worldwide, which is basically the BBC’s non-UK commercial arm.

So, if not iPlayer, more classic streaming episodes, perhaps. Certainly, if you can get over that 30%, using both Facebook Credits and another payment gateway could be one way to save costs (plug: Your Members can do that ), and in turn, make this an effective medium for any company with media content.

Another interesting possibility is organisations like Open University putting their online course material on Facebook for their students. And not just big organisations. Suddenly, anyone running an online course could have them available to individual users within Facebook. How about an online course on Facebook in Facebook, very meta!

For many people today, Facebook is the web. It’s application platform looks ready for prime time, and Facebook Credits are starting to be used regularly, even by non-farming related gamers. Is this the time Facebook marketing really grows up? Is it possible to run a Facebook-only business?

Should the BBC put money into a closed garden like Facebook, given that large companies owning closed gardens tend to start imposing more restrictive rules (cough apple)? Can any business truly survive by operating solely in Facebook? While it’s certainly technically possible, do you think it’s feasible from a business perspective?

I think it is, but having watched businesses been burned by similar platforms (Twitter/Apple/Microsoft) suddenly changing the rules, it’s not there yet. I think, until the platform fully matures, people will continue to make small steps and build small corners of their sites into Facebook. And now that it has become possible to do so easily, do agencies and businesses really have an excuse to not take those steps?

Disclaimer: I work for Coding Futures, the developers of Your Members.