Tuesday 12 November 2019

Steve Dempsey: 'Publishers should be on guard ahead of Facebook's latest news venture'

Steve Dempsey

Steve Dempsey

Facebook has some trust problems. It has admitted to allowing lies in political ads, despite protestations from staff. It vastly inflated video metrics, and paid off the advertisers that took a class action, without admitting liability.

It's under investigation in a host of US states for potential violations of antitrust law. It's also under investigation by the US Federal Trade Commission, US Department of Justice and the European Union. Its cryptocurrency, which is a Bond villain's dream, is haemorrhaging launch partners. Oh yeah, and there was that whole Cambridge Analytica thing.

It's not an impressive track record on transparency, honesty and integrity. As a result, you'd think that businesses that have been burned by Facebook before would think twice about trusting it again. You'd be wrong.

Enter the news and publishing industry. This is a sector that has been badly burned by Facebook in the past; from promises of pivots to video, to sudden algorithm changes. But Facebook is offering a new toy.

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It's called the news tab and Facebook says it's "a space dedicated to high-quality and curated news". It's been concocted collaboratively with publishers, meaning there are features that promote original reporting, recognition for subscriptions, and controls for users to hide articles, topics and publishers they don't like.

Facebook also talked to its users about what they wanted from a news product. Sure, there are questions about selection bias, but the company surveyed more than 100,000 users in the US, and found its algorithm was under-serving some of the topics like health, business and sport that people wanted to see in their news feeds.

But there are issues. Facebook has refused to provide the list of the 200 news outlets that have been designated as high-quality news sources.

Eager to keep conservative users happy, the social network has included alt-right news site Breitbart as one of these verified news sources.

With no transparency around what counts as real news, and questionable outputs making the grade, it's hard to see how the news tab can be viewed as a trusted source of news.

Facebook has justified the inclusion of Breitbart by pointing to free speech. "There will invariably be news organisations, ideological or otherwise, who say or write things that I find abhorrent," said Facebook's head of global news partnerships, Campbell Brown. "But I will always stand by their right to express their views.

"It has been a long-held American ideal that we win the day with better arguments, not by silencing those we disagree with."

So, armed with its all-American values, Facebook has launched its news product to a small number of users in the US.

And publishers have welcomed it. News Corp boss Robert Thomson, who has said some pretty harsh things about Facebook in the past, even joined its chief executive Mark Zuckerberg on stage at the launch of the news tab.

Why are publishers interested? Money, of course. The bigger publishers will be paid millions of dollars a year for letting Facebook serve their work.

Smaller publishers will have to make do with monetising their content on the news tab through the traditional Facebook way: advertising.

Paying publishers is an about-face for Facebook. "It's no secret that the internet has really disrupted the news business model," Zuckerberg said. "I just think that every internet platform has a responsibility to try to help fund and inform partnerships to support news."

According to Zuckerberg, Facebook news deals will see partners paid based on the amount of content they provide and the traffic it generates. Facebook has been paying lip-service to the idea of supporting journalism of late. But is this news tab really a shot in the arm for news, or just another shot in the dark? Publishers should be wary.

The news tab could well turn out to be a digital dog-house where news will be relegated, while the traditional newsfeed keeps its cachet as the users' primary feed. The fact that some publishers will get paid while others won't is also concerning. It creates a troubling hierarchy, where large incumbents are rewarded - not innovators.

The tab may offer large news businesses an easy revenue stream. It may be a good fit for publishers that want to monetise through advertising. But most publishers should be wary of the promises of Facebook - or any digital platform, for that matter.

The news industry has a poor track record in relation to technology. Legacy news brands failed to realise the existential threat as Craigslist disrupted classifieds.

They failed to realise the existential threat of Facebook and Google. They thought the iPad was going to save magazines and papers. Many drank the pivot-to-video kool aid. Others believed that news aggregators could make them money by bundling their content up with everyone else's.

But we can't blame Facebook for the news industry's gullibility and myopia.

The social network is within its rights to create a tab for the troublesome stuff it doesn't want clogging up the main news feed. And it has been very clear that it doesn't want to become the arbiter of truth on its platforms. Most tellingly, it's also very honest about the importance of news to the platform, in terms of users and revenues.

At the launch of the news tab, Zuckerberg said he hoped it would eventually have 20 to 30 million users. That's an astronomical number for a traditional publisher. But, remember, Facebook now has 1.62 billion daily active users.

Zuckerberg also said that he expected to spend $300m (€269m) over the next three years to support local news outlets.

Again, this number is impressive, but it's small beans for Facebook, which just announced revenues of $17.652bn for the third quarter of 2019.

Facebook may matter to news outlets, but the news doesn't seem to matter much to Facebook.

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