Facebook Offers News Outlets Millions of Dollars a Year to License Content -- Update
August 08 2019 - 5:00PM
Dow Jones News
By Benjamin Mullin and Sahil Patel
Facebook Inc. is offering news outlets millions of dollars for
the rights to put their content in a news section that the company
hopes to launch later this year, according to people familiar with
the matter.
Representatives from Facebook have told news executives they
would be willing to pay as much as $3 million a year to license
entire stories, headlines and previews of articles from news
outlets, the people said.
The outlets pitched by Facebook on its news tab include Walt
Disney Co.'s ABC News, Wall Street Journal parent Dow Jones, The
Washington Post and Bloomberg, the people said.
Facebook's plans come as the company is facing growing criticism
for its role in the news industry's struggles by sucking up much of
the advertising revenue that used to go to newspapers. Combined,
Facebook and Alphabet Inc.'s Google earned 60% of all digital
advertising revenue in the U.S. last year, according to
eMarketer.
The news-licensing deals between Facebook and news outlets would
run for three years, some of the people said. Facebook is planning
to launch the section sometime in the fall, the people said. It is
unclear whether any news outlets have formally agreed yet to
license their content to Facebook.
Facebook has proposed giving news outlets discretion over how
their content will appear in the news tab, according to people
familiar with the matter. News outlets would be allowed to choose
between hosting their stories directly on Facebook or including
headlines and previews in the tab that would send readers to their
own websites, the people said -- in which case the news tab would
be a generator of web traffic for news outlets in addition to a
source of licensing revenue.
A person close to Facebook said it plans to gather feedback from
news organizations to help improve the news tab.
Google, one of Facebook's biggest rivals, has been criticized
for not compensating news organizations for the headlines and story
previews surfaced by its search engine. News Corp Executive
Chairman Rupert Murdoch and BuzzFeed Chief Executive Jonah Peretti
have both called on Facebook and Google to pay organizations that
provide quality news. Google didn't immediately respond to a
request for comment.
Facebook's still-in-development news tab is separate from "Today
In," a section on the social-media site that serves users stories
from news organizations in their area, one of the people said.
The proposal represents a departure from the financial terms
offered by Facebook for Instant Articles, another high-profile news
feature on the social network. For that program, Facebook
compensated news outlets by splitting ad revenue with them as
opposed to paying them money upfront.
Facebook does pay licensing fees for other content. The company
doles out upfront payments for the right to show videos in its
Facebook Watch section, which is home to original shows and popular
clips. It also previously paid publishers upfront to create content
for Facebook Live, its live-video feature.
Facebook CEO Mark Zuckerberg addressed the possibility of
creating the news section earlier this year during a conversation
with Axel Springer CEO Mathias Döpfner. During that conversation,
Mr. Zuckerberg said he was committed to surfacing "more
high-quality news" and creating a "business model and ecosystem to
support it."
Some publishers remain skeptical of Facebook's latest attempt to
fund content, especially in light of its history of backing
initiatives such as Facebook Live only to scrap funding plans when
such products fail to take off. "It's asking a whole lot of
publishers in terms of asking us to commit to something that none
of us have any idea if it's going to work," according to another
one of the people familiar with the matter.
Facebook, like other big tech companies, is under scrutiny from
government regulators conducting antitrust investigations. The
Federal Trade Commission is examining whether Facebook made
acquisitions as part of a plan to head off potential competitive
threats.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
August 08, 2019 16:45 ET (20:45 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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