24 October 2016
Mark Zuckerberg does not only own all the major social media tools but is seeking to have closer partnership with content providers. Photo: Bloomberg
Mark Zuckerberg does not only own all the major social media tools but is seeking to have closer partnership with content providers. Photo: Bloomberg

How Facebook will shake up the news industry

Media companies have been debating with themselves whether to publish content on their own websites or post it directly on social networks.

Facebook is making them decide sooner rather than later.

Last month, the New York Times reported that Facebook had been quietly talking with at least half a dozen media companies such as BuzzFeed, National Geographic and the Times itself about hosting their content directly on its website rather than making users tap a link to an external site.

The plan could start trials within the coming few months.

Facebook wants to enhance the user experience but will not be involved in decisions over content that its media partners want to release to its 1.4 billion users.

The biggest attraction to media companies is the ability to deliver news feeds to a fifth of the world’s population on Facebook’s superfast servers.

Facebook has been trying to transform itself from a social network to a global media powerhouse, undercutting traditional media such as newspapers, radio and television.

This is coming at a time when traditional media companies are only now beginning to develop their online business as a revenue center by charging for content.

The strategy is largely driven by changing consumer habits.

Younger people, for instance, prefer to read the news on their social media feeds such as those on Facebook, Twitter or LinkedIn.

That has made Facebook an essential tool for traditional media companies to distribute their content.

In addition, Facebook can provide them with an extra metric for gauging user interest and engagement through its “like” button.    

But Facebook thinks the present click-through arrangement affects the quality of its service because it has no control over how content is delivered on a third-party platform such as those of traditional media companies.

The Facebook user experience suffers when readers take more time to download an external link than they should.

Facebook wants to change that — and change it across all delivery platforms from desktop computers to smartphones and tablets — and offer the prospect of increased page views for its media partners.

In return, it will run advertisements on its fan pages but will not share revenue with its media partners.

That is a problem because the model Facebook is proposing preempts the media companies’ ability to monetize their content.

In effect, they will be giving it free of charge on Facebook. Paid subscriptions could become a thing of the past.

Do media companies have a choice? Probably not, judging by the trend in social media.

In Hong Kong, for instance, a survey by University of Hong Kong journalism professor Clement So shows Facebook is the third biggest source of information for young people with tertiary education or above.

It’s outranked only by Television Broadcasts (TVB) and Apple Daily. For the general public, Facebook is No. 6, with 4.1 percent of respondents saying it is their most preferred source of information.

News providers like to keep their readers within their own ecosystem, giving them the additional benefit of valuable customer data.

But the Facebook project could filter such information directly into its database, skipping its partners’ servers.

In a news-driven market, editors and reporters pick stories based on timeliness, relevance and increasingly on readers’ particular interests.

In some instances, there is less news judgment involved and a growing number of newsroom decisions are made according to certain lifestyle choices.

Is this good for the news industry?

The answer depends on whether traditional media companies can adapt to the inevitable.

They have to be as nimble, as innovative and as quick-thinking as their new media rivals.

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EJ Insight writer

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