Facebook Pledges $100 Million for News Outlets Hit by Coronavirus Outbreak
March 30 2020 - 6:29AM
Dow Jones News
By Lukas I. Alpert
Facebook Inc. is pledging $100 million in grant money and
promised ad spending to help struggling news outlets weather the
financial blow of the coronavirus outbreak.
News outlets -- particularly smaller, local newspapers -- face
substantial advertising revenue declines as shuttered or disrupted
businesses pull back spending. While readership has spiked and some
media companies have enjoyed increases in online subscriptions, the
advertising drop is already forcing many outlets to reduce pay or
lay off workers.
The tech giant said it wanted to help news outlets avoid such
cuts. "This is a time when we need this reporting the most,"
Campbell Brown, Facebook's head of news partnerships, said in an
interview. "Advertising money is shrinking fast and even though
news consumption is up, it is not making up for those losses, so we
are trying to help bridge that gap."
Facebook's offering falls into two categories: $25 million in
emergency grant funding to help smaller news outlets with immediate
needs related to coronavirus coverage, and $75 million in ad
spending to help news outlets of all sizes -- both in the U.S. and
abroad -- make up for the expected revenue shortfall.
"Every business is suffering right now, but the news industry
has really been struggling, and we are in a privileged position to
be able to help, " Ms. Brown said. She said Facebook Chief
Executive Mark Zuckerberg "feels that getting accurate news about
the virus is vital and that he has a real responsibility here."
The aid from Facebook likely would still leave the industry with
an enormous gap in advertising money. Gordon Borrell, an
advertising market analyst, estimates that local advertising will
drop by 25% this year, amounting to a decline of roughly $30
billion.
Earlier this month, Facebook announced a separate program to
offer $100 million in cash grants and advertising credits to up to
30,000 eligible small businesses.
News publishers have a tense and complicated relationship with
Facebook and Alphabet Inc.'s Google. The tech giants drive a large
share of traffic to many news sites, but also compete with them in
digital advertising sales. Facebook and Google were expected to
earn 61% of all digital ad revenue in the U.S. this year, according
to estimates from eMarketer before the crisis.
Many news outlets have argued that the tech platforms should pay
licensing fees. Late last year, Facebook agreed to begin paying
some publishers whose headlines appear in Facebook's news tab,
which launched to a test audience in October. The Wall Street
Journal is among the publications Facebook is paying to license
news. Google has been in early talks with publishers to pay for the
use of their content, people familiar with the matter have
said.
Last week, Facebook warned that while it has seen substantial
boosts in user engagement during the crisis, it will be hit by
declines in digital ad spending.
Facebook's grant funding will be an extension of a $1 million
pilot program the company launched earlier in March as the outbreak
began picking up steam in the U.S. The company says it received
more than a thousand applications within days.
With the grant's backing, the Post and Courier in Charleston,
S.C., was able to take down its paywall on coronavirus stories and
set up remote workstations in rural parts of the state, Facebook
said. El Paso Matters, a digital news outlet in El Paso, Texas,
used the money to hire freelancers and translators to extend its
coverage in the city and across the border in Ciudad Juárez,
Mexico.
(END) Dow Jones Newswires
March 30, 2020 06:14 ET (10:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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