Facebook Rolls Out Ad Revenue Sharing Feature With Video Creators Allowing Video Partner; The Initiative Will First Roll Out On iOS

Facebook is prepping a new way to show videos on the social network as it opens the door to a new source of advertising revenue.

The new feature dubbed "Suggested Videos" is slated to initially roll out on iOS in the coming weeks and will probably come to other platforms including Android and the Web in the next few months.

When a user clicks on a video in their News Feed, a new area pops up with related videos from Facebook partners that users can also watch. A few of those videos will be advertisements, and when a Facebook user watches one of them, the social network giant will share the advertising dollars with the other partners supplying the video, PC World noted.

For instance, if a user taps on a video of a basketball game recorded by a friend, the Suggested Videos feed might probably contain videos from NBA along with advertisements. In case the user watches an ad, the social network will share the revenue from that advertisement with the NBA.

Facebook is calling the rollout a test and it comes in the wake of the social network's move to make video a larger part of its site in a bid to compete against YouTube and attract video advertisers.

Jan Rezab, chief executive and co-founder of Socialbakers, a social-media analytics company noted that "Facebook could now be very serious competition for YouTube."

Rezab added, "If I were Google, I would watch out."

Facebook chief executive Mark Zuckerberg has noted that several years from now, Facebook will be mostly videos.

The revenue-sharing model the social networking giant unveiled Wednesday, July 1 is similar to YouTube's, in that Facebook will keep 45 percent of the revenue. However, video producers on Facebook, unlike YouTube will have to split their share more ways, which possibly will leave them with a smaller cut, according to records on The Wall Street Journal.

According to a Facebook spokeswoman, the initial set of a few dozen video content partners include the NBA, Fox Sports, Funny or Die and Tastemade, a food and travel video network.

Facebook's initiative of Suggested Videos marks the first time the social network shares ad revenue with video partners. No doubt, this will eventually draw more video creators to Facebook and away from YouTube, making Facebook a more popular destination for video. That being said, Facebook will need to do a lot of catching up with YouTube, which has shared ad revenue with partners for quite some time now.

Back in 2013, Facebook began making videos shared natively on the social network site play automatically, whether they are posted by end users or advertisers. This past April, Facebook revealed that it's generating four billion daily "video views," which Facebook defines as a video watched for three seconds or more.