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June 16, 2022, 2:52 p.m.

Facebook looks ready to divorce the news industry, and I doubt couples counseling will help

Out of every 1,000 times someone sees a post on Facebook, how many of them include a link to a news site? Four. No wonder Facebook doesn’t want to write publishers big checks anymore.

Facebook will never officially file for divorce from the news business. The paperwork, the lawyers — yuck.

But let’s face it: They’ve been growing apart for years. They don’t share the same interests, they fight all the time, and what was once a fruitful partnership has devolved into gritted-teeth toleration. There was real love, once, long ago. But it’s probably best for everyone involved if they separate and start seeing other people.

It looks like that’s exactly what the social media giant is doing: getting as far away from the news business as it can.

Let’s look at two recent stories about Facebook. While they might seem to be about different things, there’s a connection. First, there’s this Wall Street Journal article from a few days ago, by Alexandra Bruell and Keach Hagey1:

Meta Platforms Inc.’s Facebook is re-examining its commitment to paying for news, people familiar with the matter said, prompting some news organizations to prepare for a potential revenue shortfall of tens of millions of dollars.

The company has paid average annual fees of more than $15 million to the Washington Post, just over $20 million to the New York Times, and more than $10 million to The Wall Street Journal, according to people familiar with the matter…

At the heart of these deals is Facebook’s dedicated News section, which curates a selection of free articles for readers. Facebook, which pays news publishers to feature their content without a paywall, in 2019 agreed to three-year deals with various publishers that are set to expire this year.

Facebook hasn’t provided publishers with any indication that it plans to re-up the partnerships in their current form, or at all, according to people familiar with the matter. The company is looking to shift its investments away from news and toward products that attract creators such as short-form video producers to compete with ByteDance Ltd.’s TikTok, according to some of the people…

Also, Meta CEO Mark Zuckerberg has been disappointed by regulatory efforts around the world looking to force platforms like Facebook and Alphabet Inc.’s Google to pay publishers for any news content available on their platforms, people familiar with the matter said. Such moves have damped Mr. Zuckerberg’s enthusiasm for making news a bigger part of Facebook’s offerings, they said.2

The second story is from The Verge, yesterday, by Alex Heath:

Facebook employees were recently given a new directive with sweeping implications: make the app’s feed more like TikTok.

Simply bringing Reels, the company’s short-form video feature, from Instagram into Facebook wasn’t going to cut it. Executives were closely tracking TikTok’s moves and had grown worried that they weren’t doing enough to compete. In conversations with CEO Mark Zuckerberg earlier this year, they decided that Facebook needed to rethink the feed entirely.

In an internal memo from late April obtained by The Verge, the Meta executive in charge of Facebook, Tom Alison, spelled out the plan: rather than prioritize posts from accounts people follow, Facebook’s main feed will, like TikTok, start heavily recommending posts regardless of where they come from

Here’s how the future Facebook app will work in practice: the main tab will become a mix of Stories and Reels at the top, followed by posts its discovery engine recommends from across both Facebook and Instagram. It’ll be a more visual, video-heavy experience with clearer prompts to direct message friends a post…

The News Feed, which dropped the “News” from its name earlier this year, pioneered a social feed that learns from explicit cues you give it, such as friending someone or following a page. TikTok went a step further by guessing what you like based on your passive viewing habits, injecting a never-ending fire hose of short videos into peoples’ screens. By removing the need to follow accounts before you see interesting videos, TikTok also leveled the playing field for creators, giving them a way to go viral overnight without a large following.

So on one hand, Facebook might stop writing checks to news publishers, having found they don’t make its PR problems go away. And on the other, Facebook wants to demote what little news still remains in its primary feed, having found that it doesn’t keep users engaged as much as an algorithm-generated stream of random videos.

This is what a breakup looks like. Facebook was not originally intended to be the world’s largest distributor of human attention to news stories. It became that, circa 2015. But that responsibility became a nuisance, and it’s spent the past seven years walking away from it. These two stories signal how ready for a divorce Facebook really is.

In one way, the timing is very fitting. It was seven years ago today that Donald J. Trump took his infamous escalator ride and announced that he was running for president. That moment changed America in countless ways — but I’d argue it was also the beginning of the end for Facebook and news’ relationship.

Facebook: News is a giant headache.

Back in the day, news content was still seen as a valuable ingredient in the News Feed’s goulash. In 2015, Facebook was in the early stages of pivoting to video and it was working hard to lure publishers into providing it; soon it would begin shoveling millions of dollars at them to clinch the deal. (That all ended well, you may remember.) Even so, Facebook traffic to news sites was still going up, up, up, and publishers muddling toward their digital future were happy for the clicks. That summer, Facebook officially dethroned Google as the top driver of traffic to news sites.

But Trump’s candidacy brought a swarm of misinformation — “Fake news!” — to Facebook. Turned out that its algorithms were uniquely suited to made-up nonsense that enrages people. Facebook went from the place where you kept up with your high school friends to the place where you learned Hillary Clinton was offing FBI agents. There was plenty of misinformation on Facebook before Trump, of course, but his election turned it into a global issue. Facebook suddenly found itself being credited/blamed for electing a president.

The company wasn’t sure how to respond; Mark Zuckerberg initially called it a “pretty crazy idea” that his little mom-and-pop operation could’ve influenced the election. But within a few weeks, Facebook’s plan became clear: News is more trouble than it’s worth. Let’s get rid of it.

They’d already taken a few steps in that direction. In 2015, Facebook announced it would move friends-and-family content higher in News Feeds, demoting posts from publishers and other pages. In the heat of the 2016 campaign, it emphasized that “friends and family come first” is “the driving principle of News Feed today.”3

But things really ramped up after the election. Facebook traffic to publishers began declining rapidly; in just 16 months, Slate’s Facebook traffic dropped from 28 million to 3.6 million. Publishers started citing “unreliable” Facebook traffic when they announced layoffs. Some more Facebook-reliant operations shut down altogether. A Facebook exec told publishers directly: “We are not interested in talking to you about your traffic…That is the old world and there is no going back.”

Facebook ran an “downright Orwellian” experiment chopping news out of the News Feed entirely in six less-than-rock-solid democracies.4 A year later, Facebook announced it was pushing even more news out of News Feed because it didn’t “spark [enough] conversations and meaningful interactions between people.” Zuckerberg complained that too often, “reading news or getting a page update is just a passive experience.” (You know, not the kind of true engagement that makes you want to click on a little thumb’s-up icon or leave a “lol.”) The cuts kept coming: Last year, it cut back on the political content (whatever that means) in News Feed.

Facebook, once news publishing’s No. 1 source of traffic, lost that title back to Google in 2017, which now sends roughly twice as many clicks as Facebook does.

How little does Facebook care about news? As of Q1 2022, only 15.8% of all News Feed content views are to posts that have an external link of any kind. And what share have an external link to a news site? 0.4%.

That’s one out of every 250.

And it’s not as if Facebook users are clamoring for news. This year’s Digital News Report, out earlier this week, included a question asking people around the world whether they though a particular platform had too much news, not enough news, or just about the right amount of news, Goldilocks-style.

The platform that the most people said was too news-heavy? Facebook. In the U.K., 21% of Facebook users surveyed said there was “too much news” on it, versus just 3% who said it didn’t have enough. (55% said “just right,” and 20% couldn’t be bothered to have an opinion.) “Too much” numbers were similar around the English-speaking world: 22% in the U.S., 20% in Australia, and 20% in Canada.

So: Facebook doesn’t need news. It’s a tiny fraction of what people see on its platform, and many more of its users would rather see less of it than more. And yet news and news-like content generate a large share of its PR headaches and negative headlines.

Is it any surprise it’s on the verge of snuffing it out entirely?

Publishers: Facebook owes us money.

At the same time that Facebook is falling out of love with news, publishers are finally getting what they’ve always wanted from the relationship: Facebook is writing them big checks!

To be fair, Google and Facebook have been writing publishers big checks for years now. The Google News Initiative and Facebook Journalism Project5 have paid publishers around the world hundreds of millions of dollars. But Google and Facebook got to decide who to give it to, what to give it for, and how much to give.

Have they written all those checks through the goodness of their hearts? No, it’s PR — an attempt to make publishers and their governments stop pushing to do something more severe.

But then Australia did something more severe. That country’s leaders passed a law that, functionally speaking, requires Google and Facebook to distribute bribes to Australian publishers. The size of those bribes is supposed to be a secret — but they have to be big enough to make those publishers happy.

Think that’s an ungenerous framing of Australia’s News Media Bargaining Code? Fine. Australia says it is merely requiring Google and Facebook to engage in “negotiations” with the country’s major publishers to determine the proper compensation they are due for…allowing their stories to reach many more people? The end result is that Google and Facebook have had to sit down with Aussie publishers and say: “Will…$20 million shut you up? $30 million? Okay, $50 million?” The negotiations are nonsense — in no way tethered to any real sense of “value” or “benefit,” stapled onto an obscure side-product no one uses rather than Google’s search and Facebook’s News Feed.

I have written repeatedly about why — despite my love for publishers getting money! — I think the Australian model is a bad idea. Maybe you agree, maybe you don’t.

But either way: It worked. Rupert Murdoch’s News Corp will now get checks from Google and Facebook each year worth about $50 million, just for its Australian outlets. That was the amount those companies thought it was worth to stop Murdoch’s decade-plus of complaining. The threat of government action — which would include seizing up to 10% of all of the platforms’ revenue in Australia — was enough to get this charade in motion.

The fact that it worked in Australia has inspired other countries to try to do the same. Canada will soon pass a version of Australia’s law. The U.K. will likely do the same, promising “Australia plus plus.” And while I still doubt it will pass, there’s a weaker bill in Congress that’s seeing “new bipartisan interest.”

Google really does need news. Not nearly as much as publishers think it does, mind you, but it’s a legit need. It needs up-to-date news in its search results if it wants “to organize the world’s information.” Google does derive value from it — not much revenue value in terms of dollars, but in terms of search quality, user retention, and more.

Now, Google would argue (and I’d agree) that it can derive that value using its fair-use rights and without infringing any of the rights of publishers or other content producers. Google derives value from every site on the internet, and there’s no good reason why publishers have “earned” a special payment no one else gets. But it’s enough value that Google is willing to throw some cash around, especially in some faraway land where there’s a coast-to-coast fence to keep rabbits out. (Or is it in?)

But Facebook? Facebook has been trying to wipe the news off its platform for years. Why would it think it should be doling out hundreds of millions of dollars to publishers it is actively trying to squeeze off its feeds?

Publishers sometimes think of Google and Facebook as interchangeable piles of money. But they have different sets of interests. Google talked plenty tough about the Australia bill as it advanced, but it was Facebook that was willing to actually pull the plug on Australian news on its platforms.

So it shouldn’t be surprising that it’s Facebook that plans to just…stop writing checks. It’s hit a little revenue bump and needs to cut costs. It has handed out hundreds of millions of dollars in order to shut up publishers, and now publishers in countries a lot bigger than Australia think they’ve figured out how to force it to hand out more — a lot more. If the checks didn’t work…why keep writing them?

And if you’re planning to stop writing them, why shouldn’t you go full in and scrunch the news content on your platform to a minimum? Facebook was born on a web browser, 18 years ago, which meant that it was at some level built around linking. That made Facebook an incredibly powerful driver of traffic. More Facebook usage meant more people clicking links which meant more pageviews for everyone.

TikTok, meanwhile, was born on a phone, five years ago, which means old web concepts like “sending traffic” are meaningless. TikTok’s goal is not to send traffic (i.e., your attention) anywhere: It’s to keep you swiping through videos on TikTok. TikTok was literally the most-used thing on the internet last year — topping even Google and Facebook. But do you see it anywhere on the list of top traffic generators for news sites? Nope.

So becoming more like TikTok is a win-win for Facebook. It helps it compete with its biggest rival. And — much less importantly for Facebook, much more importantly for news — it makes it easier to stop writing checks to publishers. “Sorry, guys, we’re just pivoting away from news. Best of luck! Come check out our Reels sometime!”

Divorces are hard for everyone involved. But with time, you can end up happier apart than you were together. Let’s be real for a minute: It’s always been weird that Facebook — essentially a database of everyone you know, mashed up with wizardly ad targeting — was a huge driver of attention to news. Google? Google’s where you look for information — it makes sense for news to be there. But the app for baby photos, silly memes, graduation announcements, and stalking your ex? It was a weird match from Day 1. It’s time for everyone to move on.

  1. The Information reported something similar with less detail last month. ↩︎
  2. Is it just me, or are “disappointed” and “enthusiasm” oddly personal, even emotional responses here for a CEO? ↩︎
  3. More than a little funny that the driving principle of News Feed will now apparently be “friends and family come second, right after this 8-second video from some teen you’ve never met.” ↩︎
  4. Sri Lanka, Guatemala, Bolivia, Cambodia, Serbia, and Slovakia. ↩︎
  5. Sorry, still not Meta here. ↩︎
POSTED     June 16, 2022, 2:52 p.m.
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