- This is an excerpt from a story delivered exclusively to Business Insider Intelligence Digital Media Briefing subscribers.
- To receive the full story plus other insights each morning,click here.
Facebook isreportedlyin talks with several major news outlets that it hopes to feature in a dedicated news section on its platform, per The Wall Street Journal. This comes several months after Facebook CEO Mark Zuckerbergrevealed that the company was planning such a project, and indicated it would be key to reconceptualizing news distribution on the site. Business Insider Intelligence
Facebook’s project will allow certain publishers to monetize its platform more directly than previously possible. Facebook’s news tab would become a designated news aggregator, with headlines and article previews that link out to publisher’s sites for full articles.
The company is willing to pay up to$3 million a year in licensing fees to the likes of ABC News, The Wall Street Journal parent Dow Jones, The Washington Post, and Bloomberg. This would be a decided shift away from how Facebook currently helps publishersmonetize through its platform, which still largely comes through referral traffic to their sites helped by its 2.4 billion users, while tools like Instant Articles have faltered.
This comes from a company that pulled$16.6 billion in ad revenue for Q2 2019 alone, and which is one half of the digital adduopoly arguably responsible for crushing the US news industry. In contrast,Twitter enables more structured payouts through content partnerships: In 2018, it paid more than 950 global media partners60% more revenue year-over-year mainly thanks to those deals, for instance.
Facebook’s licensing fees might help some publishers build a new revenue stream, but it’s likely not a solution to the struggles of smaller or local news organizations.Publishers have been complaining for years over the fact that their content boosts engagement on the social site, but that Facebook fails to give them appropriate compensation.
In theory, licensing fees could fix that, but in practice the project seems more likely to help more established organizations than publishers more broadly. The publishers Facebook has reportedly worked with for the tab are doing well on their own: The Wall Street Journal just reported2.6 million subscribers for Q2, 69% of which are digital, and The New York Times just hit4.7 million total subs, of which 3.8 million are digital.
The social giant’s move isn’t necessarily harmful, but Facebook’s licensing fees won’t solve publishers’ monetization woes, at least not in their current incarnation.
It’s likely that Facebook’s main motivation with the tab is gaining more control over how news flows on its site, helping it reduce criticism about it has handled the spread of fake news. A centralized area that contains vetted news would make moderating content in that section of the site, at least, a relative non-issue.
Ideally, it would also add to the user experience by advancing a more trustworthy space for users to keep up with the news compared with News Feed: Even though 68% of US adults say they get news via social media,57% expect the news they find there to be largely inaccurate, per Pew Research.
And as Facebook moves away from emphasizing News Feed in favor of Groups and Pages anyway, adding another high-quality content space on the platform could help it better align with its “time well spent” mission, as it could help free up News Feed to serve as a space for ” meaningful interactions” among family and friends.
Interested in getting the full story? Here are three ways to get access:
- Sign up for the Digital Media Briefing to get it delivered to your inbox 6x a week. >> Get Started
- Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Digital Media Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- Current subscribers can read the full briefing here.
Source: Read Full Article