Facebook and its parent company Meta are rethinking paying for news, reports suggest.
Back in 2019, following mounting concern that social media giants were eating into the ad revenue of journalistic publications, Facebook agreed to pay various publishers to feature their content in its News section.
This feature was initially offered only in the United States, but was later expanded to the United Kingdom, Germany, Australia, and France.
Facebook hasn't given any indication that it wants to renew the three-year deals set to expire this year, prompting several publications to prepare for a revenue shortfall of tens of millions of dollars, sources told The Wall Street Journal.
A 'Diminishing Priority'
For Facebook, professional journalism is a "diminishing priority" and the company has been “dialing down news on newsfeeds for a while” a source at a major UK publisher told Press Gazette.
The pandemic marked a period of unprecedented growth for big tech companies. Meta and Google, who rely on advertising revenue, saw enormous growth as people were trapped indoors and increasingly banked on the internet to socialise.
But lately, as the pandemic wanes, things haven't been going so well. Mark Zuckerberg recently said that Meta now plans to "slow the pace of some of our investments" due to "our current business growth levels."
In an earnings call in February, Zuckerberg also pointed out that short-form video platforms like TikTok are growing fast and Meta has to shift focus towards Reels, to rope in a younger audience.
This is one of the reasons why Facebook isn't looking to renew its news deals, WSJ reported, quoting sources familiar with the matter.
Australia-Style Legislation
Another reason is that Zuckerberg is "disappointed" by lawmakers across the world trying to introduce legislation that would force platforms to pay for any news on their platform, the report said.
Facebook and Google have fiercely opposed such legislation. In Australia, Facebook temporarily blocked the publication of any news story on its platform while Google threatened to withdraw its search engine.
Nevertheless, in early 2021, Australia passed legislation which forced the social media platforms to strike deals with news companies across Australia for hosting their content. Other countries, including the US, Canada, and the UK are considering similar laws.
India, however, has no plans to ask social media platforms to pay for news, even though Indian news organisations have expressed that there is an imbalance of power between the ‘Big Tech’ platforms and the publishers.
In the winter session of parliament in 2021, the information technology ministry told the Parliament there was no proposal to bring an Australia-style law at the moment.
How Far Will Facebook Go?
If Facebook is distancing itself from news, there are different approaches it can take.
In the coming years, it might remove all news from its platform, like it did in Australia temporarily. This would help it dodge legislation in Australia and other parts of the world that would force it to negotiate with publishers.
However, such a move could reduce the credibility and utility of Facebook in the eyes of many of its users.
By indicating that it won't pay for news, Meta could be attempting to drive down the expected price, in case new legislation, similar to Australia's, is rolled out in other parts of the world, sources told Press Gazette.
Meta might not completely end its news partnerships but change their “nature” by focusing more on news delivered in the short video format, a report by The Information suggested.
(With inputs from The Wall Street Journal, Press Gazette, and The Information.)
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