Facebook Defends Content Deals Withdrawal: ‘We Already Provide Publishers With $115m In Value … And Forcing Tech Companies To Pay For News Won’t Solve Challenged Business Models’ 

Meta says the Facebook Feed drives 2.3 billion free clicks worth $115m in ad impressions to Aussie media websites and it isn’t the responsibility of tech companies to prop up ailing media business models.

Meta has doubled down on the reasons why it is walking away from content deals with the largest news brands in Australia.

The social media behemoth says Australian publishers already receive more than 2.3 billion free clicks, which drives traffic worth an estimated $115 million in value, and that there has been a sharp decline in users consuming news on the platform.

Earlier this month, Meta confirmed it would not negotiate news content deals with Australia’s largest publishers – collectively estimated to be worth $200m – once the current contracts expire this year. 

In a ‘mythbusting’ style blog, Meta said the emergence of video reels on Facebook, a feature that launched in 2021, has seen users’ attention shift away from professionally created news, which only accounts for 3 per cent of the content consumed by users. 

“Reels did not exist in 2021, and today people re-share Reels 3.5 billion times every day across Facebook and Instagram. Primarily, we know our audiences come to Facebook to share the ups and downs of life, connect to local community groups, promote their business and or discover entertaining content.  

“As a content type on Facebook, news is highly substitutable. We have observed that when there is less or no news on our platforms, people continue to use our services”

Meta said when it switched off news availability for Canadian audiences, users continued to use the platform, even though the social media company drew wide criticism about the move.” 

The Value Exchange

The major benefactors of Facebook’s news content deals are News Corp, Nine, Seven West Media, Paramount and the ABC.

Media chiefs broadly claim that social media benefits by sharing professionally created news content because it keeps users more engaged with content on their platform.

Smaller independent publishers that don’t have content deals, such as the Daily Aus and Man of Many, have urged the Government to respond with caution because if Facebook switched off news content altogether, it would have a detrimental impact on their businesses.

News Corp’s global CEO Robert Thomson disputes Meta’s claims that only 3 per cent of content viewed on Facebook was news, describing the claim as “a preposterous figure” and that Facebook “should be focused on as well as being focused on its responsibility to all Australians.”

Seven CEO James Warburton has called on the government to take action to compel Facebook back to the negotiating table while Nine’s boss Mike Sneesby said that Meta should negotiate in good faith and provide “fair compensation” for the value exchange between publishers and social media.

Meta has disputed the suggestion that its benefits from news content and argues that it is actually media companies who reap the rewards of posting articles on Facebook.

“Much of the recent public debate suggests that Facebook needs or unfairly benefits from news content, including financially. This isn’t the case. Meta is a commercial business and it is in our interest to continue to create products and services that help us grow and be successful. The reality is that accessing news is simply not the reason most people use our services.

“News organisations choose to share their content on Facebook and Instagram. By taking advantage of this free distribution news businesses can grow their audiences, sell more subscriptions and boost ad revenue. Publishers keep 100 per cent of the revenue from traffic and subscriptions derived from outbound links on Facebook. For example, in 2023 we estimate that Facebook Feed sent Australian publishers more than 2.3 billion free clicks — for no charge — driving an estimated $115 million worth of value. 

The blog continued: “Some have accused Meta of “taking” or “stealing” news content but that’s not the case. We don’t scrape or pull content from publisher websites, unlike other companies. We provide a free service which publishers voluntarily choose to use and can benefit from.”

‘It’s Not Our Problem’

The issue boils down to whether tech companies that distribute news content to larger audiences should compensate publishers who produce that content.

Meta’s view is that it is not responsible for the systemic decline in advertising revenue that traditionally funded newspapers, and that funding news content will not resolve the wider issues around challenged business models.

“New technology has emerged, consumer behaviour has changed, and the digitisation of advertising and changes to classifieds ads has seen old traditional business models impacted,” Meta wrote.

“But forcing technology companies into commercial relationships will not solve the long-term challenges facing public interest journalism or encourage the news industry to develop sustainable business models.”

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I mostly agree with a lot of what Facebook have to say here... I believe supporting journalism is crucial due to its widespread benefits to society. However, I have reservations about the current framework of the NMBC, particularly because it tends to favour larger entities, with financial support not adequately reaching smaller outlets. An alternative approach could involve ensuring big tech companies contribute their fair share in taxes. This would provide the government with a more substantial base from which to devise strategies for distributing funds more equitably across the entire media industry.

byScott Purcell CFA 1

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1. I mostly agree with a lot of what Facebook have to say here… I believe supporting journalism is crucial due to its widespread benefits to society. However, I have reservations about the current framework of the NMBC, particularly because it tends to favour larger entities, with financial support not adequately reaching smaller outlets. An alternative approach could involve ensuring big tech companies contribute their fair share in taxes. This would provide the government with a more substantial base from which to devise strategies for distributing funds more equitably across the entire media industry.

Facebook James Warburton mike sneesby News Corp Nine Robert Thomson Seven