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Jan. 15, 2019, 6 a.m.
Business Models

Facebook is committing $300 million to support news, with an emphasis on local

Campbell Brown: “We are going to continue our work with head publishers. We’re not backing away from that, but it is a shift to local and an emphasis on local that is new for us.”

Facebook and the local news industry both had tough 2018s — but on wildly different levels. Facebook began the year by shifting its News Feed algorithm in favor of more “meaningful interactions” and less Page/news content. That evolved to include focuses on trusted news, local news, and informative news. Some viral-focused publishers folded from the loss of traffic.

(Other things, you know, also happened, like Cambridge Analytica and PR scandals and 30 million accounts hacked and threats of arresting Mark Zuckerberg at Heathrow and the words “A Genocide Incited on Facebook” appearing in a headline.)

Meanwhile, in local journalism, news deserts expanded and more newsrooms faced more cuts, with Alden Global Capital’s strip mining of The Denver Post creating a special outcry — all while reporters stayed squeezed as pawns in their parent companies’ games.

But despite the bad news on both sides, it’s still quite clear entering 2019 who has the 37 percent profit margin and who doesn’t. So now Facebook says it’s trying to make amends before it’s too late for local.

This year, the platform is pivoting to further support local news — off-platform. Today Facebook is announcing it will spend $300 million over the next three years on news partnerships and programming. (Not that it’s a competition, but that’s the same amount the Google News Initiative has earmarked for the same period.) So far, it’s allotted $20 million to expanding its local news membership and subscription accelerators piloted last year and $16 million distributed among various journalism support nonprofits and organizations: Pulitzer Center, Report for America, the Knight-Lenfest News Transformation Fund, the Local Media Association, the Local Media Consortium, the American Journalism Project, and the Community News Project. (The funding breakdown is at the end of this article.)

Campbell Brown, Facebook’s news partnerships head, spent 2018 drumming the reminder to publishers that Facebook “is not about us trying to make everybody happy…I don’t see us as the answer to the problem.” The old olive branch of Facebook traffic referrals has been withdrawn — but now Facebook is offering these programs and dollars — millions of them! — instead.

Brown spoke with me about the company’s new efforts with local news, supporting subscription paywalls through the platform, the potential of Facebook Groups (where many publishers have pivoted for meaningful interactions) and Watch seed funding, and where they go from here. Our conversation has been lightly edited and condensed for clarity.

Christine Schmidt: Tell me more about the decision making process to support these particular organizations and the work they’re doing.

Campbell Brown: Let me start from the top. I would say focusing on local news is an important shift for us. We spent the past year listening to local publishers, learning from these local news pilot programs, and really trying to see what works best for them. And that’s both on and off Facebook. It was important in these accelerator programs that we look at publishers holistically in terms of trying to figure out what really is going to work for a long-term business model. It’s a natural progression.

We know smaller publications don’t have the same resources as large publishers and that was the reason we launched the accelerator last year because we really did want to focus them and make sure we did it in the right way. Coming out of the accelerators, we found out of all the various investments we were making that this was a bright spot. Publishers were seeing some promising results. For example, The Denver Post had a 172 percent increase in digital subscriptions after the accelerator, the Miami Herald saw three times growth in the number of readers hitting the three article limit between March and June based on a test they did.

I want to be clear that we have a ton of work to do here, but it is work we are committed to because it does seem to be yielding some real progress and we’re pretty excited about it. With that in mind, it became clear that we should invest much more in the accelerator so we’re increasing that amount to about $20 million a year. We’re going to try to expand them, both in terms of the area of focus — so we did subscription acquisitions to start, we did a video accelerator in Argentina, we’re doing a membership accelerator right now — but also where we do them, like doing some in Europe where we want to add to. This will become a much bigger program and area of investment for us.

For the organizations, these are nonprofits you’re familiar with, we are all familiar with, who have been working in this space and have a better understanding of the challenges in areas where they are more able to have the biggest impact. Report for America, for example, trying to put reporters in newsrooms across the country, trying to get reporters in areas that need coverage — that to me is a no-brainer in terms of an organization we should support.

We have not allocated all of these funds — the total is $300 million over three years and that includes all of news. We are going to continue our work with head publishers. We’re not backing away from that, but it is a shift to local and an emphasis on local that is new for us. I think it’s going to be really important for us moving forward.

Schmidt: Right, the announcement highlights $16 million specifically for local news organizations in addition to the accelerator. Can you say more about what people can expect with the rest of that money?

Brown: Well, a lot more to come. We haven’t yet allocated the funds. These are our initial phase of investments. We will still be seed funding video for Watch and supporting the programs that we’ve currently launched with head publishers as well.

But one of the things we’re going to do is host a conference in March in Denver to convene all the various players in the space — whether it’s publishers, thought leaders, nonprofits, academics — who are thinking about local and the best way to rethink the local news business model and bring everybody together and try to figure out where are the areas where we should double down even more, where are the areas we can partner and potentially have even greater impact, and really look at areas that need more focus and more attention. News deserts around the country where communities don’t have any source of local news at all.

This is an easy fit for Facebook — community is obviously really important to us. For me personally, having worked in local news — I started in Topeka, then Richmond, then Baltimore, then Washington, D.C. — I know how critical local news is to a community, and it’s the right thing to do to be making these investments and it’s an area we’ll focus on in the long run.

Schmidt: These are all off-platform initiatives. What do you think this signals about Facebook’s relationship with news on the platform this year?

Brown: That’s an important point for us. We want publishers to find success whether on Facebook or a different platform or wherever it may be. That’s why I think we should approach this work holistically and look at different areas of focus. The accelerators don’t just focus on Facebook products; they look at the bigger picture for a local publisher and where their particular areas of need are. We want to support local with products as well, I don’t want to suggest we’re not going to do that.

The subscription paywall product we’ve been working on the last year is hugely important given that this is the business model that so many publishers are pursuing. We have begun to see real results there in the early test we’re doing. It’s in beta now and that work is going to continue very aggressively because we want that to work. But we also know it’s a combination of many things. There is no one size fits all solution. Publishers are approaching this in different ways and we want to be able to go to where they are as opposed to trying to offer some solution that’s [not] going to work for everyone.

We launched the subscription paywall product about a year ago with a small group of publishers to start in the alpha. We’ve expanded it now and the team is beginning to explore potentially looking at membership and other ways we can work with the paywall on Facebook. The transaction takes place entirely with the publisher. Some publishers may want to build a community on Facebook. Other publishers are just entirely focused on bringing their audience back to their site. I do think with subscriptions, for publishers who want to own that relationship, it is really important that the product works that way. They own the process, they own the relationship with their audience and can build their audience out from there. Facebook does not take a cut.

This is something we decided we really needed to do to support publishers. When the Facebook Journalism Project launched it was the number one ask from publishers around the world. So it became a real priority on the product side and continues to be.

Schmidt: I wanted to ask about the algorithm change for local news that happened about a year ago. Columbia Journalism Review had a report last year, a few months into the change, showing how a group of local publishers was seeing fewer interactions, and so I wanted to see what impact you’re seeing internally on local news on Facebook.

Brown: One thing I’ll say on this is that people need to understand is that distribution on the News Feed is going to change. It always has, it always will. For that reason, we don’t want publishers to be dependent on Facebook. We can be part of the solution, not the entire solution. I think it’s really incumbent on me and my team to be different in how we articulate that with our publishing partners. It’s the nature of News Feed that it’s not and I want to be very clear about that.

Schmidt: But that was something that Facebook was prioritizing within the feed, that the team was putting emphasis on local news and I was curious if that was still the case.

Brown: Yes, especially in terms of the product work. Back in January, we talked about some of the changes that would boost broadly trusted publishers, local publishers, and informative publishers, but the way News Feed operates is it’s going to have a different impact on many publishers. That’s the nature of the algorithm. Relying on traffic entirely from News Feed for your whole business model is not the approach that any smart publisher should take. We can be part of the solution but we cannot be the entire solution for a publisher’s business.

[A spokesperson followed up after the call, pointing out that its Today In local feature has been expanded to more than 400 U.S. cities: “We started testing Today In after we did research in which over 50 percent of people told us they wanted to see more local news and community information on Facebook — more than any other type of content we asked about.”]

Schmidt: After the algorithm change announcement last year, many publishers spent the year building out Facebook Groups and testing Facebook Watch. How do you view groups and Watch in particular as tools for news on Facebook going forward?

Brown: In terms of Watch specifically, news on Watch is relatively new. We just started seed funding news in Watch last year with a set of partners. We’re beginning to look at expanding some of those investments but I would say it’s very early days for news in terms of groups and that sort of interaction on Watch. It is certainly something we want to explore and experiment with over the longer term.

Schmidt: How would you describe the sentiments you’re getting from publishers now? Obviously, 2018 had a lot of shifts in the world, at Facebook, in the media industry, and I’m curious what you feel like you need to focus on for 2019 and what Facebook needs to focus on for 2019.

Brown: That is why we’re making this announcement today. The decisions we’re making right now around these investments are entirely based on publisher feedback. The pilot programs from the accelerator were one of our best investments from last year.

What we learned from that — what publishers told us coming out of those programs — was that it’s really worthwhile. It’s a great use of their time, they got something out of it, and they want to continue with it. When I think about where do we go from here, we’re trying to be very results-oriented, and look at where we did experiments, look at where we did smaller investments to try to figure out what works for publishers and what they told us is this is the path they want to continue to be on.

Based on that it is pursuing more accelerator programs to help build out the work around subscription acquisitions. That is a huge area of focus for us going forward, and just recognizing how important local news is both on and off Facebook. It’s on a personal level for me, but the community focus is also a natural fit for us and we’re recognizing that these smaller publications don’t have as many resources. They need our help and we think we can have the most impact in those areas.

Here are the details on where that $16 million is going:

Pulitzer Center: a $5 million grant to launch “Bringing Stories Home,” an endowment gift that will provide local newsrooms across the country with reporting grants to foster coverage on topics that affect local communities. Each year, the fund will support at least 12 local in-depth, multimedia reporting projects, plus related community outreach. This grant will also unlock an additional $5 million matching gift from Emily Rauh Pulitzer, chair of the Pulitzer Center.

Report for America: a $2 million investment in the initiative to place 1,000 journalists in local newsrooms across America over the next five years.

Knight-Lenfest Local News Transformation Fund: a $1 million investment in this fund will be dedicated to a news innovation and technology hub that is being created to help evaluate and improve how technology is used in U.S. newsrooms for newsgathering, product development and sustainable business models. The Lenfest Institute for Journalism and the John S. and James L. Knight Foundation announced in September an initial $20 million, five-year commitment to this fund dedicated to strengthening local journalism in the digital age.

Local Media Association (LMA) & Local Media Consortium (LMC): a $1 million investment across the two organizations to help more than 2,000 local member newsrooms better understand, develop and implement revenue streams through branded content both on and off Facebook.

American Journalism Project: a $1 million commitment to this first-of-its-kind journalism enterprise, which will grow and sustain local civic news organizations through venture philanthropy.

Community News Project: a $6 million project, announced at the end of 2018, partnering with some of the biggest regional publishers in the United Kingdom — Reach, Newsquest, JPI, Archant, Midland News Association and the National Council for the Training of Journalists (NCTJ) to recruit trainee ‘community journalists’ and place them in local newsrooms over a two-year period.

POSTED     Jan. 15, 2019, 6 a.m.
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