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10 June 2022
Facebook rethinks news payments
Major US news organisations could lose tens of millions of dollars in revenue as Facebook is reported to be reconsidering its investment priorities.
According to The Wall Street Journal, citing people familiar with the matter, the Meta-owned platform could shift away from news – and payment for content appearing on its news tab – toward short-form video creators in order to better compete with TikTok.
Why it matters
If the reports are accurate, the Journal alone is in line for a $10m hit (part of a broader deal between parent company Dow Jones and Facebook thought to be worth more than $20m). The New York Times, meanwhile, stands to lose over $20m and the Washington Post around $15m.
Quite apart from removing a significant slice of revenue from news organizations at a time when the economics of news gathering is under threat, it would also remove access to a layer of trusted media at a time when misinformation on social media is rampant.
Back in 2019, Facebook agreed three-year deals to pay a number of news publishers to feature their content without a paywall. Those expire this year and, so far, the social platform hasn’t given any indication on whether it will renew them.
Big tech has been the focus of regulatory efforts around the world to force platforms to pay for news. Google and Facebook have struck a number of cash-for-content deals in different markets, although arguably the main beneficiaries have been the biggest news organizations rather than the smaller ones that are more at risk financially.