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It will now be super easy for anyone to create their own livestream, and Facebook CEO Mark Zuckerberg says that he wants people to use Live to "feel connected in a more personal way," whether they're letting distant friends tune into a celebration virtually or getting a behind-the-scenes peek into the life of some celebrity.
But Live also has some important implications for Facebook's business.
For one, it helps Facebook plug into the sense of immediacy that it hasn't really mastered until now.
With Snapchat, you need to check your friends' Stories before they disappear. Twitter lets you follow live commentary around events. Live is Facebook's way of giving you reason to open the app at certain times, instead of just when you're waiting in line or procrastinating. The desire to tune into something as its happening will keep you coming back.
As advertisers continue to shift more of their TV ad budgets online, Facebook has put a big emphasis on video generally. And although Facebook hasn't rolled out a way to make money from Live videos yet (and has even been paying creators to make them), the sense of immediacy and hyper-engagement that comes with watching and responding to a stream in real time makes live video even more valuable to brands.
(Snapchat's already started using ephemerality and context to its advantage, charging advertisers big bucks to sponsor its "Live Stories," or pay for its sponsored Lenses and geofilters.)
Mitigating 'context collapse'
Facebook's emphasis on Live video may also help reverse a trend of users sharing less personal original content, a phenomenon that employees call "context collapse" internally, according to Bloomberg.
"Original broadcast sharing" on Facebook was down 21% year-over-year in mid-2015, according to leaked documents seen by The Information's Amir Efrati, who also reports that the social network found this trend worrisome enough to set up a team in London dedicated to reversing it, through various methods including algorithm tweaks that favor personal posts over links and more prompts for people to write statuses.
In other words, people aren't sharing as many baby pictures or personal updates as they used to, and that could undercut the original reason Facebook became popular in the first place.
But if lots of people decide to give Live a whirl and post their own streams, original sharing could get a big boost.
Recent research from Cowen shows that people who watch Facebook videos watch videos featuring their friends and family the most (the entertainment and news content categories ranked second and third), so there seems to be a desire there from users to see more of it.
So, Live video checks a lot of boxes for Facebook: It pulls in users, keeps them coming back, encourages them to post more original content, and gives Facebook a big runway for new advertising dollars.
Lights, camera, action.