Facebook Paywall Feature Would Be a Double-Edged Sword for Publishers
Facebook is reportedly been working on building support for paywalls and subscription models into its mobile-first Instant Articles platform. And as with so much of what the social network offers to publishers, it will be a giant double-edged sword.
The company is hoping to roll out support for third-party subscriptions by the end of this year, according to a recent report by the Wall Street Journal.
The proposed feature is still in the development stages, so it’s unclear whether Facebook is planning to take a percentage of the revenue from subscriptions that are activated through Instant Articles (as Apple does through Apple News) or allow publishers to keep all the money.
As far as the structure of the feature goes, Facebook reportedly prefers a metered approach where users would get a certain number of articles free every month before being asked to pay. This is the kind of paywall the New York Times offers. Imposing such a feature could rankle some other publishers who have harder paywalls, however, such as the Journal itself, or the Financial Times.
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There’s no question that support for subscriptions, in whatever way Facebook chooses to implement it, could be hugely beneficial to many media companies. As the social network and Google have increased their dominance in the advertising industry, many publishers have turned to subscriptions as a way of boosting their declining revenues.
According to a recent estimate by industry analyst Brian Wieser, the two digital giants now control more than 75% of the digital advertising business, and last year they accounted for almost 100% of the growth in that industry in the United States.
Subscriptions have also become more appealing because outlets like the New York Times and Washington Post have been having so much success with them, thanks to what appears to be a backlash against President Donald Trump’s attacks on the media.
The risk in Facebook’s new feature, however, is the same as it is with almost every other Facebook offering: Namely, that it will pull media companies even further into the giant social network’s orbit, and thereby give it even more control over their fate. Instant Articles itself, which formats news articles so they load faster on mobile devices, is exactly this kind of Faustian bargain. It solves a huge problem for many media companies, many of which can’t afford to come up with their own mobile solution, and it offers the potential of reaching Facebook’s massive user base of 1.8 billion.
At the same time, however, it gives Facebook an enormous amount of control over the content that publishers produce and how they make money from it. And over the long term, it risks turning media companies into commodity suppliers of news to the social network.
Surveys show that large numbers of people who get their news from Facebook—including the millennial audiences that many media companies are so concerned about reaching—can’t remember the original source of the news they read on the site. The only source that matters is Facebook. What effect does that have on a media company’s brand?
The social network also has a history of changing its mind when it comes to features it offers to publishers. A number of years ago, many bet their future on so-called “social reader apps,” which lived on Facebook and for a time brought in millions of new readers. That worked until Facebook decided to de-emphasize those apps in the news-feed algorithm, however, and all of a sudden huge numbers of users never saw those apps or the articles within them.
Reaching the billions of users Facebook has is a huge lure for publishers, and understandably so. But building your business—or at least a significant part of it—on someone else’s land can have very real consequences. Facebook may genuinely want to help media companies. But it also wants to help itself. How long until the latter clashes with the former?