{"id":11177,"date":"2015-05-13T23:10:00","date_gmt":"2015-05-14T04:10:00","guid":{"rendered":"http:\/\/www.mathewingram.com\/work\/?p=11177"},"modified":"2024-12-07T16:30:15","modified_gmt":"2024-12-07T21:30:15","slug":"is-facebook-a-partner-or-a-competitor-for-media-companies-yes","status":"publish","type":"post","link":"https:\/\/mathewingram.com\/work\/2015\/05\/13\/is-facebook-a-partner-or-a-competitor-for-media-companies-yes\/","title":{"rendered":"Is Facebook a partner or a competitor for media companies? Yes"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

As has been rumored<\/a> for some time, Facebook launched a trial project called \u201cInstant Articles\u201d on Wednesday morning\u2014a partnership with<\/a> nine news organizations, including The New York Time<\/em>s, The Guardian<\/em>, BuzzFeed,<\/em> and National Geographic<\/em>. Under the terms of the deal, entire news stories from those partners will appear inside<\/a> Facebook\u2019s mobile app and be able to be read there, as opposed to the traditional practice of news publishers posting an excerpt and a link to their website.<\/p>\n\n\n\n

At first blush, this sounds like a pretty straightforward exchange of value. Facebook (FB) gets what will hopefully be engaging content for its 1.4 billion or so users, and publishers get the reach that<\/a> the social network provides\u2014plus keep any revenue from advertising that they sell around that content. (if Facebook sells the ads, then publishers reportedly get to keep 70% of the proceeds.) So everybody wins, right?<\/p>\n\n\n\n

Note<\/strong>: This was\u00a0originally published\u00a0at Fortune, where I was a senior writer from 2015 to 2017<\/em><\/p>\n\n\n\n\n\n\n\n

And that player is Facebook, as Columbia University\u2019s Emily Bell noted on Twitter:<\/p>\n\n\n\n

The main reason why publishers like the Times<\/em> have entered into this partnership in the first place is that they are falling behind when it comes to mobile. As technology analyst Ben Thompson<\/a> points out, Facebook is quite right when it says that most news sites load too slowly and look terrible, rendering the ads on those pages largely useless. Facebook, however, understands mobile like no one else: everything loads faster, looks nicer and is more appealing to advertisers, in part because Facebook can do the kind of targeting that newspapers aren\u2019t equipped to do.<\/p>\n\n\n\n

This is what makes the social behemoth\u2019s offer so appealing. Plus, publishers get to keep some or all of the ad revenue, and they also get data about what users are doing with their content, which is always useful.<\/p>\n\n\n\n

The part of this deal that makes it a classic Faustian bargain<\/a> is that Facebook arguably gets more from the arrangement than publishers do. How could that be, when it is giving away all the revenue? Because Facebook doesn\u2019t really care about the revenue from ads around news content (although I expect most partners will take the 70% deal, if not now then later, because Facebook is better at selling ads). What Facebook wants is to deepen and strengthen its hold on users.<\/p>\n\n\n\n

\"Facebook<\/a><\/figure>\n\n\n\n

In that sense, news content is just a means to an end. And the risk is that if it stops being an effective means to that end, then Facebook will lose interest in promoting it. But in the meantime, Facebook will have solidified its status as the default place where<\/a> millions or possibly even billions of people go to get their news. In other words, it will still own the land, and who farms which specific patch of that land is irrelevant.<\/p>\n\n\n\n

One big reason why there is trepidation<\/a> in news-publishing circles\u2014New York <\/em>magazine said there was \u201cpalpable anxiety\u201d in the Times newsroom about the deal\u2014is that we already know what happens when Facebook loses interest in something: it withers and dies. That\u2019s what happened with the social games that companies like Zynga (ZNGA) developed and promoted through Facebook, a multibillion-dollar business until it suddenly wasn\u2019t. It\u2019s also what happened<\/a> with the \u201csocial reader\u201d apps that publishers like The Guardian<\/em> and The Washington Post<\/em> came up with in 2012 at Facebook\u2019s behest.<\/p>\n\n\n\n

The similarities between those apps and the current \u201cinstant articles\u201d arrangement are many. The apps allowed users to read entire articles inside an app within Facebook, and millions of readers signed up to do so. But then Facebook changed its algorithm so that these articles and apps didn\u2019t show up as frequently, and readership plummeted overnight.<\/p>\n\n\n\n

The risk isn\u2019t that an evil Facebook suddenly tries to destroy or pervert the causes of journalism, or goes to war against media entities (although the network\u2019s relationship with news is troubled, as my colleague Erin Griffith points out<\/a>, and censorship is not uncommon<\/a>). The big risk is that Facebook plunders the relationship that news companies have\u2014or should have\u2014with their readers, and then destroys their business model almost accidentally<\/em>, while it is in pursuit of other things. That\u2019s the kind of thing that concerns Facebook-watchers like veteran journalist Dan Gillmor:<\/p>\n\n\n\n

\n

Facebook \u201cinstant articles\u201d will be good for a few media orgs in the short run. But journalism will be far worse off as a whole.<\/p>\n\n\n\n

\u2014 Dan Gillmor (@dangillmor) May 13, 2015<\/a><\/p>\n<\/blockquote>\n\n\n\n

Thompson and others are right when they say that news companies don\u2019t really have any choice but to play ball with Facebook, which is why this is actually much worse<\/a> than the classic Faustian bargain. As a result of their own incompetence and\/or inflexibility, combined with the shifting sands of the digital-media market, they have lost their grip on the audience that both they and advertisers are trying to reach.<\/p>\n\n\n\n

That\u2019s why all the cards are in Facebook\u2019s hands. It has the platform, it has the reach, it has the users and it has something to offer to advertisers that most news companies can\u2019t hope to replicate. Publishers like The New York Times<\/em> have websites that users spend less than 20 minutes on in the average month, apps that no one wants to pay for<\/a>, and paywalls whose growth is flattening sharply. What does the future hold for them?<\/p>\n\n\n\n

What the social network has to offer is unquestionably going to help<\/a> any of those publishers who sign up (and that in turn will create an incentive for others to do so). The risk is that it will wind up helping Facebook more, and that eventually Facebook\u2014a for-profit company that has shown no evidence that it actually understands or cares about \u201cjournalism\u201d per se\u2014will become the trusted source of news for millions of users, rather than the publications that produce content.<\/p>\n\n\n\n

Do news consumers ultimately benefit from this deal? Clearly they do<\/a>, or at least the ones who use Facebook do. And perhaps we shouldn\u2019t shed too many tears for slow, lumbering, inefficient news providers who have failed to adapt. But what does a world in which Facebook essentially controls access to the news look like? We are about to find out.<\/p>\n

<\/div>","protected":false},"excerpt":{"rendered":"

As has been rumored for some time, Facebook launched a trial project called \u201cInstant Articles\u201d on Wednesday morning\u2014a partnership with nine news organizations, including The New York Times, The Guardian, BuzzFeed, and National Geographic. Under the terms of the deal, entire news stories from those partners will appear inside Facebook\u2019s mobile app and be able to be read there, as opposed to the traditional practice … <\/p>\n

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