Personal Note: I am still figuring out what the right publishing schedule is. I don’t want to overwhelm inboxes, so please don’t hesitate to reply if it’s too much. Onto the issue…
Axios reported that Facebook is funding two new BuzzFeed shows, which we’ll get to. But buried in the report, a little tidbit jumped out to me unrelated to the funding that’s worth looking at.
A source tells Axios that Facebook won't actually be licensing articles, but rather will be paying for links to articles and snippets of news. In Europe, regulators passed a controversial "link tax" last year, charging major web platforms for using snippets of news content online.
The link tax is Europe’s attempt at requiring platforms to pay publishers for snippets. For example, if Google News wants to include a headline and a snippet that then links to a publisher’s website, Google News should have to pay for it.
This is controversial because the law doesn’t clearly define who is targeted. It says that the rights given to publishers “shall not prevent legitimate private and non-commercial use of press publications by individual users,” but it doesn’t define what is non-commercial.
Is this newsletter in violation? If I charge a subscription in the future, would I have to pay Axios to include the above copy?
While I am in support of publishers earning money, I worry about these sorts of laws because they can be overreaching. Google News drives audience to publishers. If Google doesn’t pay, do we run the risk of losing this audience driver? Or am I being amateur about this? Would users seek out our news if we didn’t put it into Google News?
But that’s not the real point I want to highlight. What jumps out to me in the above snippet is where “a source tells Axios that Facebook won’t actually be licensing articles…”
If you remember back when I first talked about this, I said that this was the best case for publishers.
Under a headline and preview deal, a reader can only see the first couple lines or paragraphs of the article and then they’d have to click over to the website to continue reading. This is a bit more interesting because it is a little like having your cake and eating it too. You get compensated by Facebook and then drive traffic back to your site, where you’re then able to monetize from the ads.
If the money is good enough for a headline or a headline/preview deal, though, it might be worth exploring. It can be a blended audience development and revenue deal, which could be very useful for publishers.
I’ll be the first to admit that I genuinely believed that the only way any publisher was going to get $3 million was if it agreed to fork over full articles. If Facebook is going to give Bloomberg, Washington Post, The Wall Street Journal, NY Times, or any of these other premium brands $3 million for a headline and snippet feed, it’s going to be much harder to say no.
With one exception… All four of those brands I mentioned have growing digital subscription businesses. If Facebook mandates that to receive the $3 million, a publisher can’t count Facebook-sourced visits against the paywall limit, it’s definitely not worth entertaining. If I can get The Wall Street Journal for free all the time just by going through Facebook, I’m going to do that 10/10.
There’s still a lot more to unpack here and we haven’t seen any confirmed deals just yet, but this is a very interesting development.
It would still be really good to remind ourselves that Facebook has, historically, not been friendly to publishers. It entices pubs with great opportunities to make big checks and then changes the script.
But we’re publishers and we’re nothing if not masochistic.
Axios has reported that Facebook is funding two of BuzzFeed’s new shows—Did You See This and That Literally Happened—which will both debut on Facebook’s Watch tab.
Although the exact amount of money being paid to BuzzFeed is unclear, Axios reports that Facebook is investing $90 million in news shows on Watch, of which both of these fit that category.
Here’s the problem… BuzzFeed already had a show on Facebook called “Profile,” but it wasn’t renewed after its one-year run, as sources tell Axios, because of “its long-form format.” Except I’m pretty sure Facebook wanted long-form content.
Axios says at the end of the piece:
BuzzFeed has now had to take a clinical approach to transforming its video business.
In 2018, it started to transition its business out of the viral feed videos into licensed content. It's now focusing more on news programming, and creating licensed shows for social specifically, not just Netflix or other OTT platforms.
Do you know why BuzzFeed was doing those viral feed videos? Because it’s what Facebook wanted. And after that, it wanted long-form because that’s what everyone was doing.
It rewarded those that provided what it felt was the right approach. And when that was no longer the case, it no longer rewarded—this typically resulted in job losses. I don’t blame Facebook since they’re operating in their own self-interest, but as publishers, we really need to be reminded of the age-old and overused saying: “The definition of insanity is trying the same thing over and over and expecting a different result.”
But hey, Facebook, I’m kind of a masochist and I’m looking to launch a news show. Want to chat?
In other news, CBS and Viacom have merged! And boy, let me tell you, it has a great name. Introducing…
This is obviously a big win for Shari Redstone who was in charge of both of them but for reasons I can’t explain couldn’t make them merge despite fighting to do it for three years.
The two companies are now one. Viacom is bringing Paramount film studio and two cable networks, MTV and Nickelodeon. CBS is bringing itself (a pretty robust broadcast business) and Simon & Schuster. What interests me so much is that all of this work was to combine two businesses that used to be one business.
The New York Times states:
When the two companies split in 2006, Viacom’s cable networks were seen as the faster-growing business and CBS the aging, out-of-step broadcaster. Fortunes reversed in the last decade as CBS became the most-watched television network and Viacom’s youth-centered channels were eviscerated by the internet.
But anyway… Now that the two have agreed to merge, investment bankers focused on media are already discussing what other media companies could be swallowed up by ViacomCBS.
According to The New York Times, “she [Redstone] has considered the few media companies remaining, including the cable network Starz, which has a budding international business, and Sony Entertainment, which has a large television production business.”
Suffice to say, the M&A teams at these financial firms are having a great summer.
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