Several news publishers are going to be out millions of dollars as Meta is now saying, in a very subdued way, there’s no place for dedicated news systems on its ever-more algorithmically based social platforms.
Axios reported based on anonymous sources from inside Facebook that the company is officially backing out from its contracts with major news publishers. The news was later all but explicitly confirmed by a spokesperson from Meta, Facebook’s parent company.
“A lot has changed since we signed deals three years ago to test bringing additional news links to Facebook News in the U.S.,” the spokesperson said in an email statement to Gizmodo. “Most people do not come to Facebook for news, and as a business it doesn’t make sense to over invest in areas that don’t align with user preferences.”
Facebook had been paying news organisations like The New York Times, The Washington Post, and The Wall Street Journal for having their content included on the Facebook News tab. The deals were worth over $US100 ($139) million in total, with the Times being paid more than $US20 ($28) million, compared to the Post’s $US15 ($21) million and the Journal’s $US10 ($14), according to previous reports. Axios also mentioned, based on unnamed internal sources, that Facebook was paying outlets $US90 ($125) million for news videos.
The three-year deals with the news publishers were first inked in 2019, and now all that money will be going “poof” as these contracts go the way of the dodo. The contracts were first made to stave off rumblings from some advocates and lawmakers that Facebook — among other tech companies — should pay for news content hosted on their sites.
Those following along did see this move coming, though. Meta’s execs absolutely loathe the idea that they should have to pay for posts linking between sites. Unnamed sources from Facebook previously told Journal reporters they would be letting those contracts dissolve as it refocused its business model toward the vague idea of the “metaverse.” And, not to mention — making changes that make both Facebook and Instagram seem very TikTok-ish. That means CEO Mark Zuckerberg and co don’t have much need for the news publishers’ primary content since the new model emphasises algorithm-based feeds over seeing posts from those users follow.
Facebook had previously been slapped by laws instituted in 2021 by Australia forcing the company to pay for news content. During that time when the company was fighting against that law, Nick Clegg, company president of global affairs, said “Fewer than one post in every 25 in your news feed will contain a link to a news story, and many users say they would like to see even less news and political content.” Facebook would eventually launch a $US15 ($21) million news fund.
Meta might need to be saving money anyway. Its most recent quarterly report showed it had suffered its first decline in revenue ever in company history.