Social media conglomerate, Facebook, has recently launched a new paid event feature that will enable Facebook page owners and event managers to create, set up, and collect payments for virtual events. While there are many platforms available to host online business events today, Facebook’s new feature is a first of its kind, which is completely free and doesn’t charge a commission, at least for now. Better World is of the view that with this launch, Facebook entices creators in a very emphatic way.
“With social distancing mandates still in place, many businesses and creators are bringing their events and services online to connect with existing customers and reach new ones,” said Facebook in a blog statement.
“By combining marketing, payment and live video, paid online events meet the end-to-end needs of businesses. Pages can host events on Facebook Live to reach broad audiences, and we’re testing paid events with Messenger Rooms for more personal and interactive gatherings,” it added.
The feature comes free to all web and android users. iOS users, however, will have to pay a 30% app store tax as part of Apple’s tax policy. All apps on Apple’s platform have to use its payment system for the in-app payments and required to pay 30 percent tax for the same.
“We asked Apple to reduce its 30% App Store tax or allow us to offer Facebook Pay so we could absorb all costs for businesses struggling during COVID-19. Unfortunately, they dismissed both our requests and SMBs will only be paid 70% of their hard-earned revenue,” Facebook clarified in the blog post.
A tactical strategy
Facebook says users in 20 countries, including India, will be able to take advantage of this new paid event feature initially. What makes this announcement exciting is that businesses and professionals can launch, promote, accept payments, and build their user base through a single Facebook page. Event promotions can be done online by targeting specific users on the Facebook platform itself, who can pay and watch the event online.
This means that all kinds of events, from Yoga and dance classes to insightful knowledge sessions, can be hosted on Facebook for free.
Facebook is tactically marketing this new initiative as SMB-focused. The company is well aware that SMBs are the growth engines in many developing and emerging economies. By offering an exclusive and highly specialized service, it can create a vast market for itself in the post-COVID work environment. Simultaneously, by providing the services for free, it will be able to test the waters with less noise.
“In our most recent State of Small Business Report with OECD and World Bank, we found that access to cash continues to be the most common ongoing challenge for SMBs. Only 19% of surveyed businesses were getting any financial help (down from earlier in a pandemic). Many businesses are struggling, and every cent matters. Shifting in-person events to online is costly enough that companies shouldn’t have to worry about fees charged by platforms,” Facebook said.
Early this year, Facebook had also announced the launch of Facebook Shops. This initiative was to enable businesses to display and sell their products directly to Facebook users across its ecosystem, including Instagram. (See: Facebook Shops shake-up marketplaces)
A low-hanging events opportunity
The online events industry has suddenly become more lucrative due to a burst in demand, especially in the wake of the COVID-19 scenario. With work-from-home and physical distancing measures likely to remain in place for an unspecified time, businesses will continue to focus on digital avenues for meetings, conferences, and customer interactions.
Tech giants like Google and Microsoft, among others, are already putting more research and development efforts to enrich their solutions and increase their share of a lucrative online events market with good upside potential. Various studies pegged the current market size of online events at around $100 billion, slated for a five-fold increase in the next six to eight years.
Facebook, with its vast network and community of over 2.7 billion users, stands a unique chance to create a niche in the online events space. Additionally, Facebook’s Oculus division, which it acquired in March 2014 for US$2.3 billion, specializes in virtual reality hardware and software products. In future, the social giant could very much leverage the Oculus base for creating an ecosystem around virtual-reality conferences, aka events 2.0.