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A risky deal.

Byline: The Register-Guard

On May 13, nine major media outlets - including The New York Times, National Geographic, NBC News, The Atlantic and BBC News in London - joined a pilot program in which selected stories from their websites are embedded on Facebook's website, which means Facebook users can view the stories without clicking on links to the publishers' websites.

The project has the potential to make the publishers' websites obsolete, and that has a lot of people in the media business - especially print - concerned. Print publishers continue to struggle in transitioning to all-digital content; the Times, for example, still gets 70 percent of its revenue from its print edition advertising and subscriptions, even though it has a well-regarded online version.

Publishers need to replace declining revenue - that, and the carrot of gaining access to Facebook's ability to deeply mine its users' reading habits, are what's driving the project. It's called "Instant Articles" because the app (currently limited to iPhone users) allows its target audience, mobile phone users, to instantly view stories that typically take up to eight seconds to load on publishers' websites. A recent test showed that Instant Articles displayed stories in less than three-tenths of a second.

Publishers were slow to put their products online and they've been equally slow putting them on mobile phone platforms. With their smart phone audiences now lagging or even in decline, many are desperate to find ways to capture those eyeballs and hold them for their advertisers. Facebook has shown them a way to do that, but on Facebook's terms.

Instant Articles allows publishers some discretion in how their articles look, so their media "brands" are easily recognizable. It also allows them to augment stories with videos, zoomable photos, audio captions, maps and other graphics. Publishers get to keep 100 percent of the revenue from advertising that accompanies their articles if they sell the advertising themselves, and 70 percent if Facebook sells the ads. They also get access to Facebook's massive user data collection program to help them learn more about their readers, such as how far into a story a reader scrolls before exiting.

Too good to be true? Maybe. Mathew Ingram, writing on fortune.com, said the risk to publishers is that Instant Articles "plunders the relationship that news companies have - or should have - with their readers, and then destroys their [existing] business model almost accidentally." In other words, if readers can get a publisher's stories instantaneously on their mobile phones via Facebook, why would they want to use the publisher's clunky website? As Josh Constine, writing on techcrunch.com, said, "The new format could further addict publishers to Facebook, giving it the leverage of a street pusher."

Why would that be a problem? Because the people who run Facebook aren't journalists and they're not in the journalism business. Chris Cox, Facebook's chief product officer, acknowledged as much when he told the Times last month, "We see ourselves as first helping people connect with friends and family. And second, helping people be informed about the world around them."

What Cox didn't point out is that Facebook funnels news through its "News Feed," which sorts material based on an algorithm - a set of rules programmed into Facebook's computers - that selects information based on what's most interesting to the individual user. Readers get the news they want to read, but not necessarily the news they need to read.

For many publishers, it's a damned if you do, damned if you don't dilemma. In a sense, all they're giving up is their means of distribution, to an entity that clearly knows how to maximize the distribution of digital content. The problem is that Facebook is the 800-pound gorilla in the room and, as it's shown in the past, any time it wants to change the rules it can do so, and will.

Publishers could throw money at the problem and try to replicate Instant Articles on their own websites. But they have neither the surplus funds nor the expertise to do that. So some have chosen to begin ceding control of their digital distribution in exchange for increasing readership, while Facebook gets to deepen and strengthen its hold on its 1.4 billion global users. It's what Ingram aptly dubbed a "classic Faustian bargain."
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Title Annotation:Editorial
Publication:The Register-Guard (Eugene, OR)
Date:Jun 8, 2015
Words:710
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