Month: May 2018

As if we needed another lesson in the downsides of the media shackling their business models to third-party platforms, Snap Inc.—the company behind the popular Snapchat messaging app—is reportedly changing the terms of how it compensates publishers who use its Discover feature, a kind of newsstand where media companies can post short videos. According to Digiday, those who use the feature will no longer get an up-front licensing fee for their videos, but instead will get a share of advertising revenue generated by them.

“There were a lot of people who didn’t take the licensing deals, and I think some people who didn’t were bummed because the audience and ad revenue growth slowed down,” said a Snapchat Discover publishing exec. “If you were able get a high enough of a license fee based on Snap’s belief that the platform would keep growing, you were able to shield yourself.”

This feels a little like another Facebook-style “bait and switch” tactic, where publishers get hooked on a source of revenue only to have the rug pulled out from under them (as Facebook has done multiple times now, especially with video). But it’s a little more complicated than that. This is actually the second switch that Snap has made on publisher compensation, and it amounts to a 180-degree pivot back to the way things were originally.

When Discover first launched in 2015, the ability to share in advertising revenues was one of the main incentives for publishers to take part, and it was a significant draw in part because Snapchat was seen as a rocket-fueled growth story. Then in 2016, the company told media partners that it was changing tactics, and it would no longer be sharing ad revenue—instead, it would pay up front licensing fees and keep all the ad revenue.

So what are we to learn from this reversal? It seems obvious the licensing fee model didn’t really serve the company’s needs, and that could have something to do with Snap’s current financial situation. The share price has come under pressure of late because of slower-than-expected growth in the app’s user base.

In that context, it’s possible that paying out a share of future revenue looks more financially appealing to Snap than paying an up-front fee that may or may not be recouped. And that’s particularly the case if, as some publishers have said, the performance of Discover has not been stellar. Unfortunately, the new/old model leaves publishers to bear more of that potential burden than they would have under the licensing model (although Snap did say that it is testing e-commerce features, which could soften the blow).

Perhaps the only lesson that media companies could learn from all of this is that gambling on third-party platforms for growth and revenue can be a tricky business, especially when that platform is as young and untested as Snap.

Matt McAlister has been working in digital publishing for a long time now, including a stint at The Guardian as director of digital strategy, so he has a long memory when it comes to the relationship between publishers and platforms like Google and Facebook. McAlister now runs a media research company called Kaleida, which just came out with a new report looking at the health of the publisher-platform ecosystem—a report that was funded by Google, although McAlister says the web giant had no influence over the findings. As he put it in the preface:

The inspiration for this research came from the growing tensions we’ve observed between news publishers and the big Internet platforms. Many publishers believe platforms are using content unfairly to grow, while the platforms believe publishers are getting a lot of benefit from traffic directed toward news. Clearly, it’s more complicated than that.

The study used data supplied by 18 news publishers from across Europe who provided details of their traffic, combined with research from comScore, as well as consumer insights from YouGov on news-reading behavior in the UK, France and Germany. Perhaps the most eye-opening detail in the report is that a single visit to a news website from a platform like Facebook is worth on average $0.008 or just eight-tenths of a cent. In other words, you could be getting millions of referrals and still not be making more than pocket change.

Here are some of the other insights from the report:

Facebook’s annual F8 developer conference is supposed to be a showcase for all the cool new features that the giant social network is either working on or busy rolling out to its two billion users — filters that turn your Instagram selfie into a picture of a dog, and so on. But not surprisingly, given all the furore over the Cambridge Analytica data leak and Mark Zuckerberg’s recent testimony before a Congress subcommittee, the latest iteration of the Facebook love-fest started on a somewhat different note.

In an attempt to lighten the mood, Zuckerberg tried to crack a joke when introducing a new feature that would allow users to follow along with and chat about a movie or TV show.  “Let’s say your friend is testifying before Congress and you want to watch,” the Facebook CEO joked, with a somewhat awkward-looking smile. On a more serious note, however, he suggested that he has learned a few things about how the social network can be used for evil as well as good. “I’ve learned this year that we need to take a broader view of our responsibility,” he said. “It’s not enough to just build powerful tools. We need to make sure that they are used for good.”

The Facebook CEO also announced a new feature that the company said would enable users to block Facebook from tracking their behavior on the web and through apps with Facebook access.The new feature is called “Clear History,” and operates much like a feature in most web browsers of the same name: When clicked, it removes all of the data related to that user that is normally stored — data used by Facebook to help its algorithms figure out what you might be interested in, and what ads to show you (Zuckerberg pointed out that if you do enable this feature “Facebook won’t be as good” until it gets to know you again).

Please stop making this sound like a ‘feature’ they are now offering when it’s actually just a legal requirement as part of GDPR. This would be like reporting that Ford will now add seatbelts to their cars. It’s not news that they do this. But it would be news if they didn’t. https://t.co/CadeBIwZlA

— Thomas Baekdal (@baekdal) May 1, 2018

This and other new privacy-related features the social network is rolling out aren’t coming about solely because Facebook was raked over the coals in front of Congress, nor even because it is embarrassed by the data leak involving Cambridge Analytica. One of the main driving forces behind the latest changes is the need to comply with the European General Data Protection Regulation or GDPR, which is coming into effect later this month. These new rules require platforms like Google and Facebook to give users a lot more control over who has their data and what they can do with it, or face significant financial penalties.

In his testimony before Congress, the Facebook CEO was asked whether he planned to extend GDPR-like protections to even non-European users of the social network, and he hedged his answer, saying some of the details were still to be worked out. The “Clear History” feature appears to be part of his attempt to introduce enough privacy protections to satisfy regulators without actually impacting Facebook’s business in any significant way — in other words, to eat his cake and have it too.

Here are some more links related to Facebook’s ongoing struggles with privacy:

• In a blog post published just before the F8 conference, Zuckerberg talked about the new “Clear History” feature and how it works. “When you clear your cookies in your browser, it can make parts of your experience worse,” he noted. “You may have to sign back in to every website, and you may have to reconfigure things. The same will be true here. Your Facebook won’t be as good.”
• Wired described in a recent piece how some critics believe both Google and Facebook are trying to implement the GDPR rules in a way that allows them to “game the system,” leaving users no better off than they were before. The supervisor of the EU’s data protection authority called the online platforms  “digital sweat factories” whose approach to privacy is unsustainable, and said that their proposals for meeting the new rules violate the spirit of the new regulations.
• Some believe the new GDPR rules and other privacy-related regulations that emerge following the Cambridge Analytica leak could actually reinforce the power that Facebook and Google have, since it will make it more difficult for other companies to acquire data or use it to build new services. That would effectively build a wall around the data that Google and Facebook already have, argues tech analyst Ben Thompson in his subscription newsletter Stratechery.
• Facebook also appears to be restructuring itself behind the scenes in order to reduce its legal liability under the GDPR: It is moving the responsibility for data involving all non-EU users — who represent about 70 percent of the total, or about 1.5 billion — to its US subsidiary from its Irish subsidiary, meaning they will be governed by US laws on data, not the GDPR.

Other notable stories:

• A group called the Student Press Coalition did a survey of student journalists at 49 Christian colleges and universities and found that more than 75 percent  had faced pressure from university personnel to change, edit, or remove an article after it had been published in print or online. About 70 percent said their faculty advisors could stop a story from being printed.
• According to a memo obtained by Variety, staffers at NBC were told by management that if they reported the sexual harassment accusations against veteran broadcaster Tom Brokaw, they had to also mention the letter of support for the former anchor that was signed by more than 60 employees of the network — some of whom suggested that they felt pressure to sign.
• The fallout from the White House Correspondents Association dinner continues: The Hill, a site that focuses on stories about Washington politics, said it is pulling out of the event because it “casts our profession in a poor light,” and The New York Times says CBS News also considered pulling out, but changed its mind after being assured that event organizers planned to change the format.
• Speaking of the WHCA dinner, CJR’s Karen Ho dug into the finances of the event, and found that last year, the organization raised a total of almost $900,000 from ticket sales and donations for the event. About $550,000 of that went to pay for the venue and the entertainer, and only about $100,000 went towards the scholarships that the WHCA says are the main reason it does the dinner in the first place.
• Politico writes about the growing number of  news websites catering to a right-wing audience, which it calls “baby Breitbarts,” including sites with names like the Tennessee Star, the Arizona Monitor and the Maine Examiner — sites that sound like reputable newspapers but which in most cases are online-only publications that exist primarily to promote a right-wing agenda.

The news is “incredibly important to society and democracy,” Facebook CEO Mark Zuckerberg told reporters at an invitation-only event following his address to developers at the company’s F8 conference on Tuesday. But apparently that doesn’t mean the giant social network has any plans to actually pay for it directly, the way media insiders like BuzzFeed publisher Jonah Peretti believe that he should. “I’m not sure that makes sense,” Zuckerberg said when the idea was raised. Instead, he says the company wants to help media companies sell more subscriptions and generate more revenue from readers. The Atlantic writes:

At one point, Zuckerberg hinted at the need for government subsidy of American journalism—alluding to the public-television licensing model that supports the BBC. Couldn’t Facebook pay publishers directly by licensing their stories or programming? “Yeah,” Zuckerberg said, “I’m not sure that makes sense.” “I think news is incredibly important to society and democracy,” he added. “It’s just that it’s a pretty small minority” of what people are reading on Facebook.

The Facebook CEO also announced that the social network has already started elevating certain preferred news sources in the News Feed based on whether users rank them as trustworthy, a controversial approach that Zuckerberg announced earlier this year. The controversy stems from the fact that trust is an incredibly slippery concept when it comes to news — for example, surveys show that a many conservative voters don’t trust mainstream media sources like CNN, but do trust Breitbart and Fox News.

At some point, selecting “high quality” sources of news means Facebook is going to be deciding who is worthy of showing in the News Feed and who isn’t, which could have a significant impact on the traffic and revenue generated by those who are chosen and those who aren’t. Already, some publishers like Mic have seen their Facebook engagement decline by more than 90 percent, and the ranking process has only just begun. But Zuckerberg said the platform’s responsibility to news only goes so far:

“People come to Facebook primarily not to consume news but to communicate with people,” Zuckerberg said. “The way we can help out the most with that is by helping out with a business model that is profitable and sustainable for news organizations.”

Given the fact that Facebook is going to be selecting winners and losers in the media sphere, it’s interesting that Zuckerberg’s comments were made to a specific group of publications, including CNN, The New York Times, BuzzFeed, Recode and the Economist. The choice of who to include wasn’t made by Facebook, however — the group is part of an annual event called Off The Record, organized by The Information founder Jessica Lessin, BuzzFeed editor Ben Smith and Quartz editor Kevin Delaney.

Considering the sensitivity around what Zuckerberg was discussing, it was probably smart of him to go on the record with his comments, since there are already enough people out there suspicious of what Facebook is doing to the media industry behind the scenes. The bottom line seems to be that he cares about journalism, but apart from some tweaks to the News Feed and some help with subscriptions, he’s not prepared to do a whole lot about it. And perhaps that’s ultimately a good thing.

In interviews following the F8 developer conference in San Jose on Tuesday, Facebook CEO Mark Zuckerberg said that journalism is “incredibly important to society and democracy,” but at the same time noted it is a tiny fraction of what happens on the giant social network. That tension runs through all the ways in which Facebook handles news and information on the platform, including its attempt to rank sources based on how trusted they are, which Zuckerberg said Facebook has already started doing.

How are these changes going to affect media companies who currently rely on Facebook for their traffic and revenue? And how will the company decide which news sources are considered trusted or high quality and which aren’t, if users disagree? I talked with Facebook’s head of news partnerships, Campbell Brown, about those and other thorny questions, and about some of the new features the social network is working on related to news and journalism. Our interview has been edited for length and clarity.

 

I’ve heard that Facebook wants to pay news organizations to create programming for Facebook’s Watch video feature. Can you talk a bit about that? 

“This is an experiment, but we are bringing together a group of about 10 to 12 publishers and we are going to pay them directly to produce news programming for Watch. My hope is that Watch will become a destination for news on Facebook that people know is reliable, and they will find diversity of sources and different points of view. And during breaking news it would become a place to go to find whatever the most important stories of the day are. It’s a big step for us, and we’re just starting to figure this out with a handful of publishers who are going to be the early testers. I think there is real potential for us to create a destination for video news.”

Some media companies seem rather antagonistic about Facebook and how it has disrupted the media ecosystem. How do you respond to that?

“It’s not my role to lobby publishers to be on Facebook if they don’t feel like that’s the right way to reach their audience, I want to be 100 percent clear about that. But I do think for the ones who are on Facebook and who see the potential for distribution on Facebook. I want to help them make money. I want to help them find a business model that works so they keep doing what they do best which is journalism.”

 

Facebook’s changes to the algorithm are going to have a fairly significant impact on the traffic and revenue of some publishers, if they haven’t already. What would you tell them?

“What we’ve done is to down-rank clickbait and down-rank sensationalism, and we’ve given a boost to broadly trusted news sources, or what we define as informative news sources. So publishers who built a business on clickbait are not going to find success on Facebook. We are optimizing for quality journalism going forward, we’ve been very clear about that, and I think it’s the right thing to do. I’m excited that Mark and Facebook have made that commitment and I think most publishers are too. But it does mean a period of transition while a lot of publishers adjust to this new environment.”

Can you talk a bit more about that transition and how Facebook is approaching it?

“I think we are shifting how we think about news on Facebook. We used to think about it as optimizing for engagement, but now we’re optimizing for quality. So a lot of the journalism that might have been successful in the past because it got a lot of engagement — viral videos and sensationalist kind of content that everybody wanted to click on — isn’t going to do very well given what we’re optimizing for now. Now there were plenty of people who were doing good journalism regardless of what Facebook was optimized for. And I don’t think that’s changed. I just think they’re going to be much happier with how they do on the platform. And it does mean that if you are in the business of doing a lot of sensationalism and clickbait and you had a really successful business on Facebook, you are going to be impacted in a negative way by these changes.”

I think a lot of media companies feel as though Facebook often pulls a bait-and-switch tactic on them, where they are promised certain things and then the algorithm changes and all bets are off.

“I think that’s true. And some of that has to do with the different cultures of a technology company and a media company. For technology companies, the culture is to experiment and change and to modify and to iterate and to be in a constant state of change. Whereas if you’re building a media business, you’re looking for stability and consistency. And so those two dynamics aren’t always gonna mesh very well. I think what we can do to make things better is transparency and communication about what’s coming — like we may go to a publisher and say we want to test this new product, but what we also have to say is that it might not work and if it doesn’t work we’re going to change it. So don’t come test with us if you’re not ready for that ride.”

Ranking news sources on trust is a difficult problem, since a lot of people disagree on who they trust and who they don’t. Lots of people trust Breitbart News, for example.

“I think that is what makes this so hard, that we’re trying to find ways to define quality. We’re trying to find ways that are fair that can account for the different kinds of journalism out there. It’s really hard to get this right. One of the measures we’re using is to look at broadly trusted news organizations, but if you try to define widely trusted you end up with mostly big brand-name publishers versus someone small like Axios, more niche publishers who aren’t going to have the same brand recognition. So what are the quality measures you look at to ensure that we capture those publishers? And how do you get people to agree on quality measures? This is really tricky, and it’s one of the things we’re going to be devoting a lot of time to in the coming months because I don’t think that we can unilaterally make these decisions and get it right.”

It seems inevitable that Facebook is going to be accused of rigging the game or choosing the sources that it likes for whatever reason.

It’s not going to be perfect. I’m not going to lie, we don’t have all the answers yet. We’re going to do this in conjunction with publishers, we’re going to do it in partnership with academia. I want to have a broad cross-section of people in the ecosystem and engaged in conversation. I’d love to work with the other platforms on this. But even then even, let’s say we get the most broad selection of people across the ecosystem to agree on 10 to 15 quality signals that we all agree  the platforms should use to boost quality content. We’re still going to be picking winners and of not getting it right, it’s inevitable. But the alternative is not one that I think any of us can live with. We do have have to agree on a shared set of facts. And we have to do the  best we can to ensure that the information that is getting a boost is factual. I don’t have the answers yet for how we do it, which is why we’re taking baby steps in this direction, because it’s going to be really really difficult.”

 

In interviews following the F8 developer conference in San Jose on Tuesday, Facebook CEO Mark Zuckerberg said that journalism is “incredibly important to society and democracy,” but at the same time noted it is a tiny fraction of what happens on the giant social network. That tension runs through all the ways in which Facebook handles news and information on the platform, including its attempt to rank sources based on how trusted they are, which Zuckerberg said Facebook has already started doing.

How are these changes going to affect media companies who currently rely on Facebook for their traffic and revenue? And how will the company decide which news sources are considered trusted or high quality and which aren’t, if users disagree? I talked with Facebook’s head of news partnerships, Campbell Brown, about those and other thorny questions, and about some of the new features the social network is working on related to news and journalism. Our interview has been edited for length and clarity.

 

I’ve heard that Facebook wants to pay news organizations to create programming for Facebook’s Watch video feature. Can you talk a bit about that? 

“This is an experiment, but we are bringing together a group of about 10 to 12 publishers and we are going to pay them directly to produce news programming for Watch. My hope is that Watch will become a destination for news on Facebook that people know is reliable, and they will find diversity of sources and different points of view. And during breaking news it would become a place to go to find whatever the most important stories of the day are. It’s a big step for us, and we’re just starting to figure this out with a handful of publishers who are going to be the early testers. I think there is real potential for us to create a destination for video news.”

Some media companies seem rather antagonistic about Facebook and how it has disrupted the media ecosystem. How do you respond to that?

“It’s not my role to lobby publishers to be on Facebook if they don’t feel like that’s the right way to reach their audience, I want to be 100 percent clear about that. But I do think for the ones who are on Facebook and who see the potential for distribution on Facebook. I want to help them make money. I want to help them find a business model that works so they keep doing what they do best which is journalism.”

 

Facebook’s changes to the algorithm are going to have a fairly significant impact on the traffic and revenue of some publishers, if they haven’t already. What would you tell them?

“What we’ve done is to down-rank clickbait and down-rank sensationalism, and we’ve given a boost to broadly trusted news sources, or what we define as informative news sources. So publishers who built a business on clickbait are not going to find success on Facebook. We are optimizing for quality journalism going forward, we’ve been very clear about that, and I think it’s the right thing to do. I’m excited that Mark and Facebook have made that commitment and I think most publishers are too. But it does mean a period of transition while a lot of publishers adjust to this new environment.”

Can you talk a bit more about that transition and how Facebook is approaching it?

“I think we are shifting how we think about news on Facebook. We used to think about it as optimizing for engagement, but now we’re optimizing for quality. So a lot of the journalism that might have been successful in the past because it got a lot of engagement — viral videos and sensationalist kind of content that everybody wanted to click on — isn’t going to do very well given what we’re optimizing for now. Now there were plenty of people who were doing good journalism regardless of what Facebook was optimized for. And I don’t think that’s changed. I just think they’re going to be much happier with how they do on the platform. And it does mean that if you are in the business of doing a lot of sensationalism and clickbait and you had a really successful business on Facebook, you are going to be impacted in a negative way by these changes.”

I think a lot of media companies feel as though Facebook often pulls a bait-and-switch tactic on them, where they are promised certain things and then the algorithm changes and all bets are off.

“I think that’s true. And some of that has to do with the different cultures of a technology company and a media company. For technology companies, the culture is to experiment and change and to modify and to iterate and to be in a constant state of change. Whereas if you’re building a media business, you’re looking for stability and consistency. And so those two dynamics aren’t always gonna mesh very well. I think what we can do to make things better is transparency and communication about what’s coming — like we may go to a publisher and say we want to test this new product, but what we also have to say is that it might not work and if it doesn’t work we’re going to change it. So don’t come test with us if you’re not ready for that ride.”

Ranking news sources on trust is a difficult problem, since a lot of people disagree on who they trust and who they don’t. Lots of people trust Breitbart News, for example.

“I think that is what makes this so hard, that we’re trying to find ways to define quality. We’re trying to find ways that are fair that can account for the different kinds of journalism out there. It’s really hard to get this right. One of the measures we’re using is to look at broadly trusted news organizations, but if you try to define widely trusted you end up with mostly big brand-name publishers versus someone small like Axios, more niche publishers who aren’t going to have the same brand recognition. So what are the quality measures you look at to ensure that we capture those publishers? And how do you get people to agree on quality measures? This is really tricky, and it’s one of the things we’re going to be devoting a lot of time to in the coming months because I don’t think that we can unilaterally make these decisions and get it right.”

It seems inevitable that Facebook is going to be accused of rigging the game or choosing the sources that it likes for whatever reason.

It’s not going to be perfect. I’m not going to lie, we don’t have all the answers yet. We’re going to do this in conjunction with publishers, we’re going to do it in partnership with academia. I want to have a broad cross-section of people in the ecosystem and engaged in conversation. I’d love to work with the other platforms on this. But even then even, let’s say we get the most broad selection of people across the ecosystem to agree on 10 to 15 quality signals that we all agree  the platforms should use to boost quality content. We’re still going to be picking winners and of not getting it right, it’s inevitable. But the alternative is not one that I think any of us can live with. We do have have to agree on a shared set of facts. And we have to do the  best we can to ensure that the information that is getting a boost is factual. I don’t have the answers yet for how we do it, which is why we’re taking baby steps in this direction, because it’s going to be really really difficult.”