News and Meta's very complicated relationship
Who should pay for journalism and why should it be Meta?
2024 looks a lot like 2023 still right now. A lot of 2023 problems are still 2024 problems. Not least the decline of traditional media.
Onwards
The protracted and bitter breakup between news and Facebook
In 2021, Australia discovered what Facebook would be like without news for a few days after Meta pulled all news off the platform. In Canada, publishers have been living with this reality for eight months. In the 2010s Facebook courted publishers. Today, Meta says that people don't use the platform for news. This is - in part - a reaction to governments who want Meta to pay publishers.
Meta now says when the 2021 agreement with publishers expires, it won't continue to pay the likes of Nine, Seven and NewsCorp to host their content on its platform. The Australian government has drawn battle lines and has threatened to designate Meta under the News Media Bargaining Code and force them to pay.
Meta, for its part, has said it'll simply pull all news off its platforms. Given the situation in Canada, this is the most probable outcome that really doesn't benefit anybody.
There’s a coherent argument to be made for Meta being in the right, just as there’s plenty of evidence to suggest that Meta is wrong.
Who’s problem is it anyway?
This current standoff comes from two beliefs. Firstly, a liberal democracy needs a healthy, functioning free press. And that various tech platforms have undermined the free press through their actions and should compensate the media owners accordingly.
The first part is hard to argue against. The second is more nuanced.
The internet and big tech have disrupted journalism. Google - with a news tab and mission to organise the world’s information - has more of a case to be judged its product benefits from journalism. News is embedded into the product.
For Meta - primarily Facebook - this is a lot less clear. If Google is akin to a library, then Facebook is a town square where anybody can broadcast (almost) anything. News has always been part of this - even today, x% of people say they get their news from social media. It’s always generated engagement on the platform - just as discussing news is part of conversations in town squares online and offline.
But the question of compensating publishers for sharing and linking to content is… problematic. To say the least.
A brief history of making journalism profitable
Journalism has never been the easiest product to monetise. News organisations are just as likely to be owned by “benefactors” who exercise power rather than companies who passionately believe in holding power to account.
Similarly, journalism in and of itself isn’t necessarily profitable and doesn’t have any right to be. Subscriptions and advertising provide the bulk of revenue. One relies on the product to be of sufficient quality to pay money for. The other depends on the number of eyeballs who will see the advert, the alignment with the advertiser’s target segments, and the effectiveness of the medium.
In the case of advertising, the rise of Craigslist and Gumtree - and latterly Facebook Marketplace - reduced the need for classifieds, especially in local media. And the rise of the internet in general gave advertisers more options, but not more budget. If a dollar is spent with advertiser A then it won’t be spent with advertiser B.
There's also an uncomfortable truth. Advertisers wouldn’t take dollars away from print and news if it maintained eyeballs and could show effectiveness. That also relies on the product.
Anybody who has spent any time on a Reach local newspaper site in the UK will find it hard to recommend the product, while broad news publications have difficulty persuading the public to pay for news without a compelling proposition or reason why. There are a lot of places online to get news from, but a lot of news outlets struggle to make a compelling pitch for "why me".
None of this is necessarily Google or Facebook's fault. The internet in general has disrupted the news business. Facebook and Google merely were the businesses that took over in terms of reach and advertising revenue. Any business that can command a significant share of eyeballs will always be attractive to advertisers.
Tech have undoubtedly stolen attention away from the media. They've definitely taken most of the ad dollars, and even opened up other markets for small businesses who couldn't or wouldn't pay for newspaper or local TV or radio advertising.
And this is part of the problem with Australia getting Meta to pay publishers for linking to them. It doesn't actually address the main issues that are behind the decline of the news industry. It's being legislated as a competition issue, but competition for what?
It's certainly not sharing of links (if anything WhatsApp's current channels are one of the more useful ways of generating traffic that Meta's introduced, and aren't currently monetised by Meta), and it doesn't address any issues of advertising revenue or incentivise product improvement.
Meta can also ask "why us?". LinkedIn and TikTok make more of a play of being news platforms, Apple acts as a distribution gatekeeper for news, Amazon, Gumtree and others take dollars that could have been diverted to news, while everybody from Spotify to Netflix (and even media network Nine's own Stan streaming service) are just as likely to take subscription dollars that audiences might otherwise divert to news. And none of them really fall into a monopoly or competition argument.
A doomed relationship
This doesn't mean that Meta is totally blameless when it comes to the decline of the news media industry or completely honest when it comes to their assessment of how people use their platforms. Ben Shepherd, CEO of Schwartz, summarises the latter well:
"Meta published a blog post seeking to both claim that its users weren't engaging with news content in any material way and it wasn't a driver of use, but in the same post taking credit for sending a staggering 2.3 billion claimed visits to news properties in Australia. Based on 80% of the population 12+ using Meta platforms this would mean every single visitor clicked on 158 news links and then visited the article last year. An amazing figure for an audience who don't really have an interest in news. [Unmade Media's] Tim Burrowes today also uncovered ACMA data that found 48% of Australians used social media to access news, and that this figure had increased in the past year. This is consistent with University of Canberra data for the same period that found 50% of Facebook users regularly used it for news."
It's hard to believe news has no value on any of Meta's platforms and the numbers would seem to confirm it. People don't live in a world where news and social media exist in different bubbles. News will always have some crossover with social.
It's the kind of argument that cynics could look at and conclude that Meta is protesting a little too much. They could, if so desired, tweak the algorithm so that we see more news and links out to news sites are upweighted, as they've already shown they can downweight news in the feed.
Throttling the reach of news organisations could potentially be a rationale for demanding some form of payment and starts to fall more into monopolistic behaviour from a distribution perspective, but which publishers should be compensated, and how much is it really worth? And why Meta and not Apple or LinkedIn? And elevating the reach should potentially mean more traffic and more advertising dollars for news media, not less (although I'd also argue that solely building a publishing business on display advertising alone isn't sustainable).
As for the overall decline: when Meta did take an interest in news, it did irreparable damage to the industry. Many publishers are still scarred from the pivot to video. The "free" social media traffic sent to publishers led to a rush of short-term decisions to stake a lot of future money and revenue on Facebook's willingness to continue to provide eyeballs. Huge amounts of VC money was pumped into new publishers who'd figured out how to maximise the algorithm, further disrupting legacy players - although legacy models have been more robust than the VC and IPO route.
But Meta has no obligation to keep incentivising news. It may have been a boon for publishers, but Meta has never been an altruistic platform and social in the early 2010s was more beneficial to publishers than Facebook. The 2016 US election saw more scrutiny on Meta as a distributor of misinformation and hastened Zuckerberg's retreat from news - again, the value to Meta versus the hassle didn't really incentivise the business to prioritise news.
You can justifiably point a lot of fingers towards Meta and social media in general when it comes to aiding the demise of news. But it still doesn't present a coherent business or legal argument to charge Meta under competition laws.
What exactly are we legislating?
The big question that isn't addressed in this game of brinkmanship is what exactly are we regulating here?
You can make an ethical argument and say that Meta's complicity in misinformation and inflation of the value of video that saw a lot of money sunk into unprofitable ventures, means they owe journalism, but what should reparations look like here? Many of these actions are now over a decade old and the media landscape looks different now. Compensation here seems to be more a civil than a criminal or competition issue.
Misinformation, which is a very valid and pressing concern, is a very different question that's more about regulations, moderation and algorithms, with journalism a side issue. An important side issue to tackling the problem, but still not an issue that easily leads to a compensation argument.
You could just as easily make an argument for forcing media owners to reopen or reinvest in local media, given much of it has been gutted over the past decade. Again, though, this isn't really the question here, although Meta has probably benefited most from the flow of digital advertising out of local media.
Liberal democracies can also make a coherent argument that a healthy, well functioning free press is important to society, but this isn't really a Meta question either.
You can rightly ask who should get subsidies, if it's wise to put the government in charge of handing out subsidies, and where the subsidy money should come from, but none of these questions are tech or social media questions and don’t lend themselves to a compensation argument from Google or Meta.
The shakedown for Meta and Google has always looked like a tax proposal in disguise. It’s not hard to envisage a digital advertising tax that subsidises journalism but is applied more equally than singling out two big companies.
It’s not a perfect solution - who and why and how are equally complicated questions to answer - and doesn’t necessarily follow that it would save journalism. But it’s more honest than the current situation and it allows Meta and the government to emerge from brinkmanship where both could claim a form of victory.
Judging by Meta’s actions in Canada, there’s very little question that the tech giant isn’t bluffing on their threat to remove news. It will affect all publishers but it’ll be the smaller publishers who have less ability to diversify traffic and revenue sources who will feel the pain first and worst.
There’s no easy or correct solution here, but there are some bad answers and solutions to difficult questions. Currently Australia is indulging in some bad solutioning. It’s hard to see this ending well on the current trajectory.
A quick disclosure: I have some interest here, as I oversee a digital publisher and plan advertising campaigns on Meta. The above is written in a personal capacity.
Minor Dispashes
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Playing us out this week: Caesar On A TV Screen by The Last Dinner Party. It’s rare that an incredibly hyped band delivers and then some, but Prelude To Ecstasy is a strong contender for album of the year. Thoroughly recommended.