May 14, 2015

Image by Deposit Photo

Image by Deposit Photo

Fear and loathing.

That’s an initial response to Facebook partnering with nine content companies, including the New York Times and BuzzFeed. Many in the media echo chamber are wondering, “What’s this mean for us?”

No shortage of editors and publishers took a pass Wednesday in speaking on the record. But Larry Kramer, president-publisher of USA Today and a onetime tech luminary, underscored his curiosity and qualms.

“I think all of us in the media need to pay attention to this experiment with Facebook,” he said in an email.

“On the one hand it is definitely a publishing platform that we all have to pay attention to, because so many people are spending so much time consuming content on it. On the other hand, in publishing here we are further de emphasizing our role as editors who influence what you should be spending your time on.”

“And, we are acknowledging that the reader is more a customer of Facebook’s than ours. Both a bit concerning.”

“In the end, we increase the reader’s engagement on Facebook, not our platforms. So, who’s customer are these readers?”

Facebook and its “outreach” team went after a select group of big fish media. So while there were rumblings for months about something being up, your average publisher and editor knew little, if anything. Even USA Today was very much in the dark.

“We’re now talking to FB to fully understand the deal,” Kramer said. “We might play, but the terms have to be right and we’re not at that point yet. They have hired people to do outreach, but they did this first deal with some select partners, so our discussions with them have just begun.”

The first responses to my queries were perhaps notable in that nobody has a sliver of a doubt about the role of social media in their financial futures. It’s not like the newspaper industry’s often tragically slowpoke response to the coming of the Internet and the belief, which was held by too many for too long, that cyclical ups and downs would be repeated.

Wrong. They watched print circulation drop and advertising flee. The broadcasters, too, watched the fragmentation of their markets. Some may not have either the ingenuity or resources to deal with the revolutionary changes but few misunderstand the basic problems.

And few misunderstand an apparent strategic reality at the heart of the headline-grabbing partnerships.

“It is nothing less than a seismic shift when prominent publishers – including such legacy brands as NYT and such digital powerhouses as BuzzFeed – cede control of the distribution and monetization of their content to one of their two most fearsome frenemies in Silicon Valley,” said Alan Mutter, a former newspaper editor who is a consultant-analyst in San Francisco.

“The other frenemy, of course is Google, which joins Facebook in driving hefty amounts of traffic to their sites.”

For sure, he said, it’s no dramatic surprise that publishers “are willing to tiptoe deeper onto Facebook’s turf, because they need to know if it makes good business sense to let a third party handle the marketing and monetization of their expensively produced content.”

“In the near term, this probably will prove to be a plus for the participating publishers,” said Mutter. “The looming question is whether Facebook will change the rules of the revenue sharing game after it starts building tons of page views by luring piles of content away from the publishers.”

“If publishers get hooked on the incremental dollars generated by Facebook, it will be hard to pull back their content if Facebook demands a larger share of the advertising pie than it is claiming today. “

“I think they are putting themselves on a treadmill with no idea of what they will do if the treadmill stops,” said Jim O’Shea, former editor of the Los Angeles Times and managing editor of the Chicago Tribune.

“They are sacrificing audience for ad revenue, which is what they did to get themselves in trouble,” argued O’Shea, a former financial reporter. “In my view, the newspaper industry got into trouble when they subordinated the interest of their readers to that of their advertisers. They are doing the same thing here, giving Facebook the audience for the ad revenue or a slice of it.”

“That being said, I don’t know that they have much choice,” he said. “Deals like this just extend the lifeline. Eventually, they will have to face up to the fact that no one will pay them enough for their content to support the cost of gathering it. And if readers start thinking they can get quality content on Facebook or Google (when in fact they are not), they will begin ignoring the underlying brand. Don’t know if this is a good idea or not.”

So what do the smaller news operations do?

It’s pretty unavoidable.

“We found at the [Milwaukee] Journal Sentinel — like the rest of the industry — that our traffic was increasingly coming directly to story pages from social media rather than through the home page,” said former longtime editor Marty Kaiser.

The Journal Sentinel is a superior paper that operates in a distinctly smaller, more local universe than big city counterparts in New York, Chicago, Los Angeles and elsewhere. For now, Kaiser says, it will be a very interested observer.

“I think watching what happens with the New York Times and others is the best option for smaller news organizations.”

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New York City native, graduate of Collegiate School, Amherst College and Roosevelt University. Married to Cornelia Grumman, dad of Blair and Eliot. National columnist, U.S.…
James Warren

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