The promise and peril of Facebook’s publisher payment plan

By L. Carol Christopher


Pleasant Hill, California, USA


In another chapter of the oft-contentious, on-again/off-again relationship between Facebook and news publishers, The Wall Street Journal recently broke a story that Facebook has offered a select handful of publishers up to US$3 million a year each with a three-year contract to license news. This includes Bloomberg, The Washington Post, ABC News, and Dow Jones.

The promise of additional revenue is certainly a motivator for most news media outlets.

“Publishers potentially would welcome help in building audience and revenues as print dwindles and digital exponentially increases the number of competitors while shaving ad CPMs from the levels previously enjoyed in print,” said Alan D. Mutter, a veteran media executive and news industry analyst who conducts study tours for INMA. 

The breaking news story revealed The Washington Post, ABC News, Dow Jones, and Bloomberg to be among the news media companies offered the contract.
The breaking news story revealed The Washington Post, ABC News, Dow Jones, and Bloomberg to be among the news media companies offered the contract.

But some calculations might be in order here. “A US$3 million annual licensing payment to The New York Times would cover only a slim percentage of its newsroom budget,” Mutter explained. 

Facebook has something far less tangible at stake, according to one analysis. After a “years-long controversy” over what some perceive as “its failure to reckon with its influence on society and the ways bad actors have manipulated its platform,” this move, speculatively, would allow it to use its “massive cash reserves” to “re-establish itself as a destination for authoritative news and genuine discussion.” It might, in the words of another analyst, “help allay an impending regulatory onslaught.” 

Said one media executive: “With governments around the world mulling anti-trust actions against the digital titans, licensing payments to publishers will make Facebook and the other tech giants look like good actors at the same time they make nice with the bosses of the people who write anti-tech screeds.” 

If the initiative goes through, the content would be located in a curated, news-only area — a news tab on Facebook beginning later this year, reports the Columbia Journalism Review. An earlier report by Business Insider said Facebook executives have said the tab will not replace the news that’s in Facebook’s News Feed. The concept was first floated publicly by Mark Zuckerberg in April in a YouTube interview with Axel Springer CEO Mathias Döpfner.

 Mark Zuckerberg talked with Axel Springer CEO Mathias Döpfner about the concept in April.
Mark Zuckerberg talked with Axel Springer CEO Mathias Döpfner about the concept in April.

By some estimates, the news tab would draw 15% of Facebook’s users — or more than 350 million readers. CNBC reported “the tab would give news high prominence on Facebook, alongside core features like the News Feed (which includes updates from friends), Messenger, and Watch (for videos).”

The WSJ report stated: “Facebook has proposed giving news outlets discretion over how their content will appear in the news tab. News outlets would be allowed to choose between hosting their stories directly on Facebook or including headlines and previews in the tab that would send readers to their own Web sites … in which case the news tab would be a generator of Web traffic for news outlets in addition to a source of licensing revenue.”

The talks with news organisations are continuing, added The New York Times, and it is unclear if any deals are close. So far, representatives for Dow Jones, The Times, and The Post have remained silent. A Facebook spokeswoman confirmed that the company was aiming to include a news tab inside its app by the end of the year but declined to comment further.

But that off-again/on-again thing we mentioned earlier is significant. Facebook has a history of encouraging news media outlets to design products for its use, only to back away after scarce time and resources have been committed. That leaves some news publishers skeptical if not cynical about the current initiative. 

“The emerging model for publishers is to meet their audiences away from platforms entirely — on their own apps and in real spaces at events and conferences — and to find revenue from sources that cannot be withdrawn by a third party’s algorithm change,” said Emily Bell, director at the Tow Center for Digital Journalism at Columbia Journalism School.

Many analysts believe publishers will be careful about entering into a new relationship with Facebook.

“This will be particularly true if Facebook doesn’t give publishers the identity of, and data about, the people who view their content on Facebook,” said Mutter. “Publishers aiming to sell subscriptions will want to track anyone who sees their content on Facebook.” 

The reason publishers might collaborate with Facebook, he explained, is that it has a number of “superpowers” that they lack.  He enumerated those superpowers in this article

It will be an important step forward for publishers if Facebook agrees to license content.

“The best thing about Facebook being willing to pay publishers — assuming it indeed goes forward to do so — is that it would recognise the principle that quality journalism costs real money to produce,” Mutter said. “If Facebook starts paying for content, the move likely would encourage Google, Apple, and others to start paying for content, too. That could become a valuable business.”

About L. Carol Christopher

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