News outlets have become increasingly dissatisfied with how online platforms like Facebook and Google are consuming the digital advertising market and gaining more control over the online distribution of news. This month, a group of publishers started an effort to gain group bargaining rights so they might be able to negotiate more effectively with the online platforms that are threatening their business models.
While nearly all publishers have shifted their attention to increasing digital revenue, most are still seeking profitable solutions that will work in the long term.
Although many publishers recognize the importance of online platforms for getting their content in front of broad audiences, there are also drawbacks. Publishers are concerned about losing valuable ties to their readers, particularly subscriber data and payment connections. Readers may also become accustomed to staying in Facebook to consume news, instead of, say, navigating directly to publishers’ sites.
At the same time, Facebook has drawn criticism, particularly from publishers, for its role in distributing untrue articles that readers can mistake for real news.
Other companies have used publishers’ wariness of Facebook to their advantage. Last year, Google introduced its AMP tool, a way to expedite the delivery of partners’ articles in search results. Amazon, meanwhile, is paying publishers to post articles on Spark, its commerce-related social network unveiled this week.
Facebook’s move to test a news subscription product may be an effort to appease publishers as it combats this and other issues, including regulatory and antitrust scrutiny. And if Facebook were to adopt the subscription feature, it would move the platform closer to controlling the relationship with the reader — a relationship that news outlets used to own directly.
It is not clear if Facebook will benefit financially from a news subscription feature. The company does not intend to take a cut of payments to news outlets, according to one of the people familiar with the talks. Facebook indirectly benefits, however, by encouraging people to spend more time on its site; while they are there, those users will see more ads.
As more publishers move toward subscription models, a news subscription service like the one Facebook has proposed could work to their advantage by driving more casual readers to pay for news.
But it could have risks. If many news outlets participate in the feature, it could create a bundling effect, allowing readers to read potentially hundreds of free articles a month — 10 from The New York Times, 10 from The Washington Post, 10 from The Wall Street Journal, and so on — before they are asked to pay.
An earlier version of this article misidentified the news outlet that first reported Facebook’s plan to introduce a new subscription tool. It was The Wall Street Journal, not Digiday.