Meta report: News publishers need Facebook more than Facebook needs news

By Peter Bale


New Zealand and the U.K.


Facebook-owner Meta gets its retaliation in first against news publishers pushing governments and regulators to compel the company to pay for content seen on its platforms in a new research report that turns the tables on the argument from publishers.

The report from NERA Economic Consulting comes up with broad claims, Meta says:

  • News from publishers is only 3% of what users see on Facebook, and that share has declined over time.

  • Publishers post to Facebook to get the social media traffic they crave and gain from.

The essence is that publishers get a better deal from Facebook than Meta gets from publishers and that Facebook users don’t really care about news anyway.

Meta quotes the report as finding there is “no economic foundation for news publishers’ contentions that Facebook is a ‘must have’ platform for publishers or that it possesses an ‘imbalance of bargaining power.’”

It is a familiar argument from both Facebook and Google that publishers derive at least as much economic benefit from being on their platforms and gaining traffic to the sites as any gain the platforms might have from surfacing news in their services. The difference is the level of independent research in the latest report and its timing.

The report, "Meta and the News: Assessing the Value of the Bargain," shares why the Big Tech company thinks news media publishers are getting the better end of their relationship.
The report, "Meta and the News: Assessing the Value of the Bargain," shares why the Big Tech company thinks news media publishers are getting the better end of their relationship.

Governments in CanadaNew Zealand, and elsewhere are preparing legislation that tries to achieve what Australia mandated two years ago: that the big technology firms must compensate publishers for journalism that is rendered on the platforms in social media or search. California, too, is considering new legislation, requiring Google parent Alphabet and Meta to pay for news.

Meta comes out fighting, saying that not only is news a tiny percentage of content in feeds but also that its customers largely don’t value it as much as more personal posts. It also points out — as Meta Chief Executive Mark Zuckerberg has before — that most news is posted to Facebook by publishers themselves rather than other Facebook users.

“Proposed government interventions designed to force Meta to provide monetary compensation to publishers based on allegations of market power or disproportionate bargaining power are not thus justified by the available evidence,” Meta quoted the report as concluding.

Meta has long argued that must mean publishers perceive value from being on Facebook because they put their journalism there whether Facebook wants it or not. If so, that argument goes, why should Meta compensate publishers for content they post themselves or for content other Facebook users may choose to share with their friends?

It is clear Meta and Zuckerberg find the whole debate around paying for news on Facebook aggravating and that publishers have, on the one hand, asked Facebook for support with journalism projects and payments for news while also pushing regulators and politicians to act against the Silicon Valley behemoth.

Meta has all but shut down its teams supporting news publishers and closed its “news tab” service, which gave it a surface it could pay publishers for.

The latest report essentially says no one on Facebook really wants news, and if they do, they put it there themselves. And that Meta really has no way of knowing what news is there and why should it care or pay for it if it derives little or no benefit from news others post.

It is a short step from there to one of the potential scenarios that Facebook experimented with in Australia and withdrew from — identifying news and preventing it being posted to the site.

The latest statement in response to the NERA report again threatens to cut news out of Facebook and Instagram if the Canadian law goes ahead.

That may be easier said than done since Facebook struggles to identify posts that are or are not news, especially when posted by ordinary people as opposed to from publisher accounts. They may be able to stop The Globe and Mail from publishing through its own account, but it is much more difficult to detect a Globe and Mail story posted to Facebook by an ordinary person.

But Meta makes clear that at a time when it is facing competition — presumably a reference to TikTok — it really has no time for the claims of publishers struggling with the long-term secular decline of the media business and expecting Facebook to somehow compensate for that.

“Our focus is on our core business and responding to what our users want. For most of our users, that’s not news links,” Meta said in its statement (ouch!), adding: “Facebook users are increasingly interested in creator-driven content, especially video.”

The detailed NERA report, led by noted media and Internet researcher Dr. Jeffrey A. Eisenach, makes clear where it thinks the benefit lies and it sure isn’t with Meta. Rather it is the publishers who need Facebook and Instagram more than Meta needs publishers.

“The evidence presented here indicates publishers reap considerable economic benefits from their use of Facebook, including by exposing their content links to Facebook users and driving traffic to their Web sites,” the report says. “This results in more subscribers and higher advertising revenues for publishers.

“While Meta also benefits to a relatively small extent — in that some Facebook users enjoy the ability to share and engage with publisher content — the evidence suggests news content is highly substitutable with other content on the Facebook platform, meaning the loss of news content would not significantly reduce user engagement on Facebook.”

My take: NERA and Meta have a point, but publishers have the bit between their teeth and the ear of regulators and politicians. On the other hand, maybe they are still fighting the last war since the real struggle may now be against some of the same Big Tech platforms deploying Artificial Intelligence search agents such as ChatGPT built on decades of publisher content.

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About Peter Bale

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