Facebook Builds a Wall

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Facebook Builds a Wall
Facebook Builds a Wall

“If you build it, they will come” is a promise made in a film. For publishers who have pushed for Facebook to put in a paywall on the platform's article previews, the hope is, “if you build it, they will subscribe.” Facebook is going to comply.

The social media giant plans to build a feature on top of its Instant Articles that would limit readers to the standard 10 articles that publications like the Wall Street Journal set as a max for free access. Once they try to read beyond that limit, Facebook users would hit the same kind of paywall they would see on the publisher's own platform that would direct them to subscribe for access. Tests of the new feature are to go in effect in October.

The reason this is happening now is that publishers figure the only way they can stand up to the dominant platforms is by standing together. On July 10, nearly 2,000 of them, represented by  the News Media Alliance, petitioned  Congress for an exemption from anti-trust classification to allow them the power of collective negotiation.

The organization's president and CEO, David Chavern, outlined the argument for publishers of the world to unite in the face of the stronghold of the platforms in a Wall Street Journal opinion piece published on July 9. Accessing the article demonstrated exactly what the publishers are concerned about. Going through the Wall Street Journal directly only revealed a preview and a demand for a subscriber log-in to continue. But by finding it on Facebook's platform, I was able to access the entire article. 

Chavern makes the point that the publishers, enriches the platforms that gain the eyeballs and the ad revenue for the journalistic work of others:

The problem is that today's internet distribution systems distort the flow of economic value derived from good reporting. Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70% of the $73 billion spent each year on digital advertising, and they eat up most of the growth. Nearly 80% of all online referral traffic comes from Google and Facebook. This is an immensely profitable business.

Chavern cited figures for earnings, though newer ones were just released on July 26.  Facebook reported "a 45% year-over-year rise, with the company experiencing a 47% annual increase in ad spend ($9.16bn)."  With so many billions generated from ads, it's no wonder that the news outlets feel they are not getting their fair share.

Though it is not clear that Congress will accede to the News Media Alliance's request, Facebook is trying to show that it regards the news outlets as partners. That is the reason why it hired NBC/CNN alumna Campbell Brown as Head of News Partnerships at Facebook at the beginning of this year.

She's the one who announced the plans for a pilot program to go into effect in October. If it proves successful, it would be expanded in 2018.  Likely, among the things for Facebook to work out is how to build a subscription feature in a way that it doesn't suffer any losses of its own ad revenue, and that – rather than subscriptions – is really where the money is for publishers.

As for the paywall itself, there are always people who find ways around them. As Robert Frost observed, “Something there is that doesn't love a wall,” and that is even more true of digital ones than of those built out of stones. 

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