CBS is bringing Stephen Colbert and James Corden to Facebook Watch. Watch, Facebook's high-stakes bid to build a powerhouse video hub online, will debut short-form clips from CBS' "Late Show with Stephen Colbert" on Thursday afternoon and "Late Late Show with James Corden" on Monday. But it will not be producing original content for the platform. The addition of such high-profile content could be a boost for Watch, which has struggled to gain its footing as a destination for video viewing. Video posted to Watch does well in Facebook's News Feed, but making the Watch hub itself stickier is central to Facebook's plan to encourage more viewing and visits. Ad revenue to content creators has been modest at best as well, according to participants. CBS' new experiment with Watch could be seen as a sign that the network at least thinks Facebook will figure out how to drive more people to the hub and adopt a more rewarding ad model. Terms of the CBS arrangement, including who will sell the ads and how revenue will be handled, were not dislosed. CBS Interactive President Marc DeBevoise declined to comment on the company's advertising relationship with Facebook. The late-show clips will run with ad breaks to start, DeBevoise says, though he expects the inventory to grow and the ad model to evolve. "We wouldn't be doing this if we didn't see a financial opportunity," DeBevoise says. Late night shows are considered desirable content for the platforms because they provide fresh content regularly and they are known for sparking conversations in the culture at large. A Facebook spokeswoman declined to comment on the ad sales and revenue model with CBS. "The significance of this deal is about expanding our Watch offering to present more fresh and engaging content, which is a priority for us," she says. "With CBS and late night, these are shows that build community and encourage a lot of engagement." Late night shows are considered desirable content for the platforms because they provide fresh content regularly and they are known for sparking conversations in the culture at large. Facebook has been massaging its video offering for just these kinds of deals with major networks and studios, which have been reluctant to sign on to the program as originally structured. While Facebook lets networks sell brand integrations in Watch videos, it has handled sales of actual ad units itself and shared the resulting revenue. But plenty of major media companies want to handle their own ad sales, undermining their interest in Watch so far. Late last year, Facebook confirmed that it will test letting partners sell their own ad inventory, through it is unclear whether CBS will be one of the participants. In recent weeks, Facebook said it would start testing pre-roll ads, a preferred format for many publishers, because the commercials are more likely to be served rather than waiting until a minute or more in the video stream. Facebook is also potentially considering hiking the share of ad revenue Watch creators receive from 55 percent to something more on par with rival video services, according to a person familiar with negotiations. And by allowing partners to sell their own ads, it could help attract more high-profile partners, like TV networks and studios, which typically prefer to have control over the ads in their content. Facebook is in a content arms race with almost every major tech platform Apple, Amazon, YouTube, Twitter and Snapchat, as all are looking for media company stop create next-generation shows that appeal to a generation of viewers who are less tied to their TVs. In 2017, digital video ad spend grew faster than the digital ad market, according to the latest Interactive Advertising Bureau stats. In the first half of 2017, digital video spend in the U.S. hit $5.2 billion, up 36 percent from 2016, while overall digital ad revenue topped $40 billion, up 23 percent from the first half of 2016. CBS has lightly experimented with the Watch platform through its GameSpot brand with the original show "Today I Learned," which DeBevoise says has performed well. The company is looking into creating more content for Watch, DeBevoise says.
Facebook will air clips from CBS's late-night shows, starring Stephen Colbert and James Corden, on its Watch channel. CBS Interactive President Marc DeBevoise refused to comment on the financials behind the deal but said: "we wouldn't be doing this if we didn't see a financial opportunity". Facebook has struggled with audience engagement and lacklustre ad revenues on its Watch site, which faces competition from Apple, Amazon, YouTube, Twitter and Snapchat. Thursday it revealed it was allowing partners sell their own ad inventory.