Is Facebook eating the media, or saving it from itself?

Facebook, it is argued, is eating the media. With the launch of autoplaying native video and lightning fast-loading Instant Articles, Facebook isn’t just letting publishers share their content with readers – it is hosting the content itself, and in doing so, shaping how audiences experience that content.

The trouble for the media, it seems, is that once Facebook controls both publishing and distribution, it will have even more power to control publishers’ traffic and access to audience data – and therefore their monetization as well. But might this be a power grab that serves users and saves publishers from themselves?

The dangers of depending on Facebook

Publishers find themselves in a tricky spot. None of them set out to become beholden to Facebook. Most fell into depending on Facebook passively because their readers were sharing on Facebook without prompting. Once they realized the incredible ability of the platform to drive traffic, they started engaging more deliberately. Even BuzzFeed, who built their audience and monetization model on Facebook sharing (it accounts for over 50% of their traffic), did so because Facebook was where the audience was, not because they wanted to depend on the platform (CEO Jonah Peretti’s famous ‘distributed’ content strategy).

And publishers are right to be wary of depending on Facebook. Their brand partners provide a cautionary tale: they were encouraged to build large followings on Facebook, only later find they needed to pay Facebook in order to reach a meaningful number of those fans. Zynga faced a similar fate when it found overnight that the in-app purchases for its Facebook-hosted games would have to be made via Facebook ‘credits’ – a service that Facebook would charge 30% for. In both cases it’s clear that Facebook gained from a change that arguably had little impact on users (in the case of brands it was arguably negative – cutting users off from content they’d signed up to see).

A user-centric power grab?

But, I would argue, this move by Facebook is not simply a nefarious grab for money and power. This is a push for a drastically better user experience. Money and power are simple a pleasant extra. With both Facebook Video and Instant Articles, Facebook has dragged publishers, kicking and screaming, toward providing users with a cleaner, faster browsing experience.

The problem for users was that publishers’ desire for ad revenue and user data had led them to overload their sites with megabytes of software that added nothing to the user experience, but added massively to loading times and data consumption. A New York Times report showed that over half the loading time of leading publishers’ mobile sites was driven by the need to load advertising tech and content. These delays meant that people browsing Facebook and then seeking to load articles or videos from the publisher sites were stuck staring at blank loading screens. This was a bad user experience that made browsing on Facebook less attractive, and therefore reduced the value of the users to Facebook.

Facebook’s grab cut through this. With Facebook hosted content, Articles would load instantly,  and videos would play automatically, as long as they were hosted by Facebook itself. And in the process, Facebook would control more of the user experience – making it cleaner, clearer and more uncluttered.  Facebook can then give the publishers data on users and share with them the revenue from any ads that run alongside the content.

Publishers saved from themselves

In other words, the power grab can been as Facebook saving publishers from themselves. It lets them get data about customers and get revenue from targeted ads with a vastly superior user experience.

The devil, of course is in the detail. Facebook knows that this user experience is compelling and has resulted in radically higher user engagement. (Publishers know this too – just as BuzzFeed or the Washington Post). And while commercial terms are no public, it seems safe to assume that Facebook is capturing a substantial portion of the additional value it creates.

There is no doubt that this move deepens the publishers’ dependence on Facebook. But it does so in service of their end users. More importantly, it is also an acknowledgement from Facebook that publishers are critically important to its ability to engage and retain users. Already Facebook has shown that it’s not immune to publisher pressure, with reports in November suggesting it is looking at changes to Instant Articles that will improve publishers’ revenue per article.

On top of that, having Facebook cajole publishers into Facebook-hosted content seems a significantly lesser evil than having Facebook launch its own content production in house. In that light, this represents Facebook insisting that both sides stick to their knitting: Facebook will focus on a compelling, user-friendly experience it can sell ads against, and publishers will focus on producing great content.

The price is eternal vigilance

This isn’t to say that publishers can rest easy under the benevolent gaze of Facebook. They will have to watch Facebook carefully for plans to adjust the terms of these programs. Continuing to maintain their own sales and ad tech capabilities will likely be necessary, to give credibility to a thread to pull out of the Facebook hosting ecosystem. However it seems that continuing to produce great content that people want to share on Facebook – thereby remaining important to Facebook – is the best insurance policy in an uncertain world.

By: Steve Hind


4 Comments

  1. Louisa Xu

    Unlike the Monittor speaker in class, it doesn't seem like publishers have the option of closing shop and/or not engaging with Facebook in the first place. I wonder how many of them will develop the capabilities to sell and serve the ads themselves in order to capture 100% of the revenue generated from Instant Articles ads, vs. the 70% they would get if FB sells ads for them. It seems like they have little bargaining power in the format and volume restrictions that FB can choose to impose.

  2. Carlos Carrasco

    This seems to be another great case of "living with the enemy." My opinion however, is that in this case the risk posted to the publishers and other media producers is far less than we may think. Mostly because as mentioned in the post above, FB lacks the capability (and probably desire) to become a publisher itself. One of the great things from FB is the amount, quality, and variety of media ready available in the social platform. Squeezing the publishers too much could turn into a backfire that FB with all "its money" would have a very hard time compensating.
    This will definitely turn into a love-hate relationship, but at least in my book, I wouldn't worry so much about the future of the publishers. As Steve said, the best insurance is to continue to produce great content.

  3. Steve Hind

    It certainly would be interesting to see Facebook start hiring journalists – they'd have an unbeatable advantage in their ability to base articles on trending social media topics, for sure.

  4. Fridtjof Berge

    Great article – I have to agree that Facebook's latest moves have made the user experience on mobile extremely fast and neat! As for publisher's best move I do believe you are right in sticking to Facebook while keeping plan B and plan C in case of overnight changes. It is pretty unique that we are seeing such a dominant actor in this space with no significant competitor at the moment.