Look to the past for lessons on the news industry showdown with Facebook
News and commentary this week that leading news organizations are close to striking a deal to publish directly to Facebook's platform reminds me, and others, of an industry faceoff six years ago with Google.
As you may recall, Rupert Murdoch had denounced Google for "stealing" content in its news summaries. William Dean Singleton, chairman of MediaNews and the Associated Press board, threatened a war to protect newspapers' copyright at AP's and NAA's 2009 conferences in San Diego. Google's Eric Schmidt spoke to the NAA and faced a number of hostile questions.
We all know how that turned out. Google won. They continue publishing Google news summaries and referring traffic via search. Except to the AP itself, Google generally hasn't paid for news it borrows. An AP-led effort to organize a licensing collective (NewsRight), never found its legs. American publishers have accepted Google as a useful source of digital readers and continue to pay to use Google AdSense and other tools on their sites.
The heart of the parallel is obvious. Facebook is now quickly supplanting Google as the major avenue to digital content, especially for the millennial/social/smart phone audience so cherished these days. Publishers might wish it to be otherwise but the dominance of Facebook referrals is a fact of life.
It is what Sir Martin Sorrell, CEO of advertising giant WPP, had in mind when he christened the big tech companies "frenemies," a decade ago, borrowing a term popularized in teen social chat. On the one hand, they are competitors -- potent ones -- for advertising dollars. On the other hand, making peace, dealing with their ubiquity, and looking for mutual benefit, makes a lot more sense than an unwinnable war.
This frame of reference makes me dubious of the deal-with-the-devil nay-saying popping up in tweets and longer posts. I am also not so sure the boys and girls at the New York Times, National Geographic, BuzzFeed and other potential Facebook partners need a lot of advice from the sidelines about what deal terms to accept. The principals may know, but we don't yet, the splits on ad revenue, the integrity of paywalls, and other crucial details. So it's early to say they may give away the store.
Some of the differences now and then are relevant to the developing Facebook story too:
- Google had a simple and powerful negotiating stance with publishers. If you prefer not to give away a news summary in return for the resulting traffic, feel free to opt out. Few even tried and those who did (including more recently some German and Spanish publishers) found the pain far exceeded the gain.Facebook's relationship to content and platform issues generally are far more complex now than then. There is plenty of room to negotiate and define mutual advantage.
- In particular, data and customized news and advertising content, barely nascent concerns in 2009, are on the radar of any big publisher now. At the same time, catching up to the Googles and Facebooks, in data sophistication, not to mention their massive raw numbers of users and pageviews, really is not in the cards.
- The Google showdown was newspaper centered. Newspapers thought of themselves as the unchallenged center of the news universe. Walled gardens were still in style. They were also reeling from the sharp revenue declines as a deep recession piggybacked on the secular shift to digital content and advertising. Hence the anger -- and search for a convenient scapegoat in Google.Only one of the three named first players headed for the Facebook publishing platform is a newspaper -- the Times itself. BuzzFeed is all digital, and not much affected by the ad revenue split question since it relies on live-anywhere native ads and does not run banners. National Geographic is a venerable magazine brand remaking itself of multiple platforms. Terms that fit for each of those three and other players to be named could be different.
- Facebook has a lot to gain. If it directly publishes a much higher volume of quality content, that could bring on board the 15 or 20 people who are not already members. And it could help hold the group experiencing Facebook fatigue and ready to drop -- in the case of the youngest users for a mix of other social platforms.
- Facebook directly addresses a pain point for publishers. Evidence accumulates nearly daily of how slow load times, especially for video on smart phones, causes potential users to quit before they even get started. Facebook has solutions to what even big publishers struggle to perfect on their own or with expensive vendor help.
- The initial New York Times story was less than definitive about whether we are talking about publishing all of a news organization's content or some of it. I am guessing the latter, at first anyhow, which leaves plenty of room for adjustment after the beta pilot.
So, yes, not without peril, but this could be the beginning of a beautiful friendship. In the not too distant future, publishers and big tech partners may no longer see data as mine versus yours, but rather as ours.
For that matter, six years down the road, tech giant Z, yet to be invented, may be challenging Facebook's place as the behemoth which publishing cannot afford not to deal with.