Quality news content providers are between a rock and a hard place. The second-worst decision they could ever make is to give their content for free for Facebook to host, but probably the very worst one is not to.
It all feels a bit like the music in 2006 doing deals with streaming services, it offers them a chance to reach more people, to put music in the hands of people who perhaps would never pay for albums, but at the same time risks devaluing the content, almost intrinsically because access is made more easy.
Newspapers like the New York times are like many legacy companies facing the deeply unfair reality that they tooled up and invested for another age. Like taxi medallion owners, stores like Borders or Blockbusters or manufacturers like Kodak, they’ve complex expensive assets to make and distribute things that, in a digital age are abundant, undervalued and intangible.
The New York times now spends vast sums of money on the salaries of journalists who write world-class content that gets printed overnight and spread around the country in complex logistical operations. Facebook, on the other hand, makes nothing, hosts a few megabits of data on its server, and then gets to monetize with the best personal data ever known where all the money is made — the customer interface.
Now, many of these companies made stupid mistakes. Uber is killing taxis because the entire industry rested on its laurels protected by a false wall of regulation. Kodak and Blockbuster were arrogant and dismissed the idea that anyone could overtake them. Nokia made smartphones before Apple, but failed to see that it was about software and experiences, not hardware. And other industries like travel and music just became a victim of software and digitalization eating the world. The question becomes not if they should change, but how do they change.
Quality news from the New York Times or the Bild, being available for free via Facebook, spreads content further, but it also undermines its entire subscription model.
Hosting content on Facebook doesn’t seem like the hardest move for media owners who currently have an advertising-only funding model. From the native-only BuzzFeed, to the Guardian or BBC, this seems like a way to make more money, get more eyeballs and most likely learn way more about how content behaves. For others it’s not so simple. Quality news from the New York Times or the Bild, being available for free via Facebook, spreads content further, but it also undermines its entire subscription model, which happens to represent the major growth in their business and potentially their best hope for the future.
So does the New York Times see this as free content marketing to gain subscribers, or as incremental advertising revenue? Only time will tell. Maybe they don’t even know?
Whether it feels like a hard or easy choice I am confident that time will tell this to be the begging of a tough time in journalism.
The Death of News Brands
We’re used to consumer news that was produced and curated by the news mast. We’d buy the Times and navigate that paper; our relationship was with the brand. We’d read widely across subject with the commonality being the news provider.
In the modern age the front page is now Twitter or Facebook. We read at an article level, and the subject matter, the point of view and the writer become the brands. The newscasts fade in importance. Is this article reflecting better on TechCrunch for hosting or Tom Goodwin for writing? How does that change when you see this via social media?
We’re starting to see the same in music and television, we once bought albums, or watched NBC on a Saturday night. Now we tend to love specific songs and enjoy Breaking Bad without a thought to the channel. When content becomes unbundled from a provider, the provider loses control.
Things Change
This loss of control could ultimately prove deadly, Facebook may appear to be playing nicely, to host content for free and pass through 100 percent of the ad revenue, but is this balance of power going to stay that way?
Facebook doesn’t have the best track record of keeping things in brands’ favors. What was free to access and too good to last became a pay-to-play model. When Facebook becomes our portal to the web for so much of the world, news brands become the more desperate parties in the mix. Where does that lead?
It’s an interesting time in news content. How news gets produced, monetized and distributed is set to change. Will native become the preferred route? Will micro payments or bundling finally help brands extract money for valuable content? Will other revenue streams from e-commerce or commercial partnerships become as big as some think?
One thing is for sure: This is an experiment. But while deals can be cancelled, consumer behavior doesn’t unlearn. A Faustian pact can’t be undone.
