BuzzFeed CEO: Google, Facebook Should Share More Revenue
October 18 2017 - 04:25PM
Dow Jones News
By Laura Stevens
LAGUNA BEACH, Calif. -- Tech giants Facebook Inc. and Alphabet
Inc.'s Google will have to find better ways to share revenue with
media companies to support quality content, said BuzzFeed Chief
Executive Jonah Peretti.
"The business model of news is changing, and if Google and
Facebook take all the revenue but don't want to pay for the fact
checking, the reporting, the more-intensive investigations, who
does that work?" Mr. Peretti said Wednesday at The Wall Street
Journal's WSJ D.Live technology conference. "I think Google and
Facebook are going to have to fix that."
News outlets increasingly are pursuing subscription models and
putting content behind paywalls, which limits that news to a
smaller portion of the population, Mr. Peretti said. Meanwhile,
Facebook's news feed, in particular, tends to support low-cost
content, Mr. Peretti said. He said he thinks Facebook is aware of
this and will work on creating more ways for media companies to
earn revenue on its platform.
More digital ad spending has been flowing to Facebook and
Google, which are expected to eat about 63% of U.S. digital ad
dollars this year, according to eMarketer. That means there's less
money to go around for other publishers, like BuzzFeed.
Still, Mr. Peretti said BuzzFeed is confident advertising is
still a good model. The company has worked to diversify its revenue
streams with other business areas.
Facebook recently altered the formula for its news feed to
punish publishers that churn out vague or misleading headlines
designed to lure users into clicking. Under the new formula, posts
from publishers that rely heavily on what Facebook considers click
bait will be placed in fewer news feeds and appear lower in those
feeds.
The big tech platforms are now a hybrid between a place where
people are getting their news and entertainment and communicating,
said Mr. Peretti.
"The platforms are finding themselves caught in the middle," he
said. "They have a difficult job."
(END) Dow Jones Newswires
October 18, 2017 16:10 ET (20:10 GMT)
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