Business Technology

Thursday 14 December 2017

Facebook trifles with news subscriptions as publishers look on and hope

Stock photo: Bloomberg
Stock photo: Bloomberg
Steve Dempsey

Steve Dempsey

Last Monday, it emerged that Facebook is to create a tool that will allow its 1.94 billion users do something they can't currently do; pay to consume news. Cue rubbing of hands and sighs of relief from publishers with a subscription-based business model. Facebook was finally going to play ball.

The social network is reportedly planning a feature that will allow people to subscribe to publishers directly from the Facebook mobile app. Details were thin on the ground, however. Will readers be able to read some articles for free? Maybe. How will it work? Through Facebook Instant Articles, maybe.

When will it be ready? By the end of 2017, possibly. How will payments be handled and will Facebook get a cut? Who knows?

Facebook issued a vague and generic statement. "We're working with partners to understand their business and explore ways we can help them drive more value from Facebook. We are taking the time to deeply understand their different goals and needs," it said.

The news industry must be wondering what is taking so long. Its needs are clear; it must monetise the content it creates.

Whether Facebook is an ally or an enemy in this regard is a matter of debate. For some, it's a source of traffic, visibility and brand-awareness. For others, it's a home to fake news and free content that devalues journalism and blows up filter bubbles. For many, it's both.

Facebook has been courting the news industry for some time. It launched Instant Articles in May 2015. These are fast-loading articles that keep the reader on Facebook's own app, rather than sending them to publishers' websites. Facebook shares the revenue from these instant articles with publishers or lets publishers keep the lot if they sell ads directly. It has recently tried to make these instant articles more appealing to publishers by adding sign-up buttons and more ads at the bottom of instant articles.

Facebook says Instant Articles is a success and participating publishers have seen their revenue per 1,000 page views increase by more than 50pc in recent months.

But some publishers have voted with their feet. The Guardian and the New York Times, for example, have ditched Instant Articles.

Facebook has also been dangling the carrot of its live video tool in front of news outlets. It spent more than $50m (€45m) in 2016 to encourage publishers and celebrities to stream live videos.

It seems that this gravy train has dried up, however, with the emphasis on creating longer, TV-style shows, rather than one-off videos.

And in some instances Facebook also pays news outlets directly for content. But not enough, perhaps. Channel 4's News editor Ben de Pear told marketing magazine The Drum that Facebook paid the broadcaster a pittance for the over two billion video views its content delivered last year.

"A proper news organisation can't earn enough money off Facebook to wash its face," he said.

So Facebook's subscription surprise was welcomed by many. Especially given the duopoly that is sucking up all the growth in digital advertising - Google and, yes, you guessed it, Facebook.

Any assistance in driving direct revenue is greatly appreciated. But before subscription aficionados get too excited, they should take a second to understand just where news sits in Facebook's greater scheme of things.

Facebook's aim is to keep users in one place - on Facebook. News has a role to play in this, but only a small one. And Facebook has been clear about this. Last year, it updated its news feed to prioritise updates from friends over news outlets and other pages. The news feed is less about news and more about feeding users a more-ish cocktail of videos and personal updates.

Why does Facebook want to keep users engaged? Because its core business involves selling highly-targeted ads against free media created and shared by the public and publishers alike. Subscription mechanisms and the friction they would introduce if rolled out at any scale that would be meaningful for publishers would damage Facebook's current cosy set up.

What's more, Facebook's algorithms often prioritise entertainment over hard news. Distraction trumps information, it seems.

As such, publishers' news content can seem little more than the sprinkles on Facebook's trifle. Good for show, but unlikely to be missed. So here's the question, if free trifle is on the menu, how many people are going to pay for the sprinkles?

Sunday Indo Business

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business